Preamble

The House met at half-past Nine o'clock

PRAYERS

[MADAM SPEAKER in the Chair]

Genetically Modified Food

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Pope.]

Ms Joan Walley: I feel as if I have hit the jackpot because there are so many hon. Members here on a Wednesday morning. I welcome their attendance, which supports the call made in business questions last Thursday for a debate on genetically modified food. I am delighted to have an opportunity to discuss the issue.
Food is of fundamental importance to us all. It is obvious that public concern about food standards is extremely high. As well as opinion survey evidence, we can see for ourselves that our local supermarkets are stocking more organic produce—food produced by farmers working without chemicals. The organic food market's annual growth rate is estimated to be about 40 per cent. That growth is happening despite the premium that customers must pay to eat those foods, and demonstrates people's desire to eat healthy, nutritious food.
That concern is entirely understandable. Fifty years ago, many people grew food themselves on allotments or in gardens, and I have to declare an interest in that my family has an allotment. Farms at that time seemed more understandable and less mechanised. Many people worked casually in fruit and vegetable picking. Only the other week, when we had a debate about school terms, we were reminded of how the school terms were organised around the need for people to go and pick fruit and vegetables. We seemed closer to our food then and felt that we understood where it came from. Now, food production seems much more distant.
More than ever, we rely on big business to provide our food. It travels great distances, comes from huge mechanised farms and is sold by huge supermarkets, so people do not know exactly what has gone into it. Antibiotics, pesticides, herbicides and other chemicals are all used in growing food. People's uncertainty about how our food is grown and produced is driving the growth in the market for organic produce. I strongly believe that the Government have a role in making sure that all the necessary safeguards are in place.
Now, with technology moving on, the building blocks of food itself are being altered through genetic engineering of crops. People are concerned about that. A MORI opinion poll taken last June found that 61 per cent. do not want to eat genetically modified food. They want healthy food, produced in an environmentally

sensible and sensitive manner. It is those concerns that I am so grateful to have an opportunity to raise today. I owe it to my constituents to do so.
I bring to the attention of the House a letter that I received the week before last from a constituent from Middleport. She writes:
I just want to say that we as a family do not want genetically altered food, and I don't know many who do. Perhaps you could pass this message on".
My message to my constituent is that I am passing on her words to Parliament. I do not apologise for doing so because this is the one place where GM food needs to be discussed.
I want the Government to respond to the concerns of my constituents and those who participated in one of the first citizens' jury panels organised by Dr. Tom Wakeford. I am pleased to see here my hon. Friend the Member for Cambridge (Mrs. Campbell), who last week chaired a meeting of the parliamentary environment group on the subject.
The time is right for this debate. The report of the inquiry of the House of Lords European Communities Committee into EC regulation of genetic modification has just been published and awaits the Government's response. The Cabinet enforcer has just announced the joint review of the framework for overseeing developments in biotechnology. There is still time for late submissions to the public consultation. We are also in the throes of setting up a Food Standards Agency. As a vice-president of the Chartered Institute of Environmental Health, I am delighted that the Government are making that move and I want this debate to take place in good time for it.
The reform of the common agricultural policy is likely to be agreed in mid-March, setting the future direction of EU agriculture. In February, Environment Ministers from 170 countries will meet in Colombia to sign the biosafety protocol. In researching and raising this issue, however, I have the sense that time is running out and that this is an 11th-hour attempt. I also have a sense of deja vu because I tabled an early-day motion in January 1997—two years ago—which set out my concerns.
Since then, much has happened that is regrettable and makes informed public debate much more difficult. For example, since GM soya beans were mixed with non-GM soya beans in America—Monsanto has persisted in its view that segregation is impractical—it has become impossible for consumers of many processed foods to know whether those foods contain GM soya. Some 60 per cent. of processed foods use soya. The vast majority of us have, therefore, already been exposed to those beans, whether we like it or not.
Many share my concerns. Sainsburys, for example, in evidence to the House of Lords, made a point of saying that it had tried unsuccessfully to persuade Monsanto and the American Soya Bean Association of the need to segregate genetically modified soya from the standard crop for reasons of consumer choice. This is a timely debate. Things can be done, but there needs to be an urgency about them.

Mr. Cynog Dafis: The issue of segregation is very important. I know that farmers in my constituency feel increasingly obliged to ensure traceability, which imposes considerable additional cost


on them. They accept, however, that that is necessary for consumer confidence. Should not traceability apply particularly to genetically modified organisms?

Ms Walley: I could not agree more. The hon. Gentleman has exposed the myth that genetically modified food is somehow in all our interests because it is cheaper.
My first request of the Government is for the Minister to give careful consideration to announcing a moratorium on the planting of GM crops. That has been requested by a wide range of groups, from the Government's official advisers on wildlife, to the wholefood trade, environmental groups, consumer groups and organic farmers. The reasons for such a request are numerous.
Despite reassurances that the products are rigorously tested and safe, unexpected incidents of illness have, apparently, been caused by such products. In the worst case, I understand that a United States epidemic of eosinophilia myalgia syndrome—EMS—affected about 5,000 people. An estimated 37 died and 1,500 were left permanently disabled with sickness.
I understand that the outbreak was traced to a batch of food supplements produced by genetically engineered bacteria. Dr. Michael Antoniou, senior lecturer and head of a research group at one of London's leading research hospitals, pointed out that that illustrates the difficulty that,
Even in simple cases such as bacteria, where genetic modification can be carried out with some precision, unpredictable disturbances in bio-chemical functioning with disastrous outcomes can occur.
He comments that it is
not surprising … that unexpected toxins and ill effects have been documented in more complex genetically modified organisms such as plants.
There are questions, too, about the testing of GM products. I have been sent a series of letters on the testing of GM soya, which raises concerns. In one, Ministry of Agriculture, Fisheries and Food officials confirmed that animal feeding studies were carried out when testing the safety of GM soya beans. In a subsequent letter, the Advisory Committee on Novel Foods and Processes confirmed that the feeding tests
were considered in the context of the evaluation and safety of human food use of the soya. They were indeed relevant".
However, in the final letter, the Minister, who I am pleased is present, told us that
the information from feeding studies is … not considered … to be of much value to novel food assessments.
If information from such tests is really of little value, it is surely a matter of concern that it was a relevant part of the testing procedure. I hope that the Minister can expand on that point in his reply.
As well as the safety issue, we must consider the environmental impact of the products. I am delighted to bring to the House's attention the fact that the Environmental Audit Committee, on which I sit—I am pleased to see other members of it present—has decided to inquire into and report on the issue.
Farms cannot be isolated; cross-pollination inevitably occurs. I attended a meeting only last week at which fear was expressed to me, especially on behalf of beekeepers,

who are concerned about cross-pollination. It could result in weeds inheriting resistance to weedkiller, raising the spectre of so-called superweeds. Other effects, such as plants generating their own insecticide, could lead to insects developing immunity to the toxins.
The impact of GMOs on wildlife is of great concern to organisations such as the Royal Society for the Protection of Birds, whose views I value. Along with other organisations, it suggested that the Advisory Committee on Releases into the Environment—ACRE—does not have a broad enough membership. ACRE' s chairman, Professor John Beringer, suggested in oral evidence to the Lords inquiry that there are holes in the regulatory system, whereby no Government advisory committee is currently looking into the impact of agricultural practice on wildlife population. All such issues deserve the House's urgent scrutiny.
Furthermore, there are fears that the introduction of plants that are resistant to specific weedkillers will lead to farmers using more such weedkillers on their fields. Given that the Government's wildlife adviser, English Nature, is linking the major decline in farm wildlife with intensive farming, that cannot be a sensible way to go. Indeed, English Nature is so concerned that it has issued a statement declaring its support for a moratorium on the commercial releases of GM crops. Its GM adviser, Dr. Brian Johnson, said:
There is plenty of evidence that our farmland wildlife has suffered a major decline in recent years. The environmentally untested introduction of GMOs could be the final blow for such species as the skylark, corn bunting and the linnet, as the seeds and insects on which they feed disappear.
I very much welcome the work that the Government, especially the Department of the Environment, Transport and the Regions, have done on indicators. We could be undermining all that brilliant work.

Dr. Ian Gibson: Does my hon. Friend agree that the birds that she has delimited have declined in numbers anyway due to pesticides, insecticides and other chemicals in the environment? Indeed, the DETR takes account of the number of skylarks and other such factors in setting parameters for the assessment of the assuaging of the environment.

Ms Walley: My hon. Friend is right to say that there has been a decline in all kinds of wild bird species, which is of concern. I am also aware, however, that companies such as Monsanto have been blaming some of that decline on farm cats. We must consider the production of food and its effect.

Dr. Lynne Jones: Will my hon. Friend clarify whether she is calling for a moratorium on the planting of all genetically modified crops, or just one on the commercial planting of GM crops? There is a difference.

Ms Walley: There is certainly a difference. I am calling for a moratorium on commercially grown crops, which may be a practical first step, but I would not rule out support for a general moratorium. We must assess how we can make progress in stages—and certainly quickly.

Mr. Barry Sheerman: However well intentioned the Government are, there is great frustration


at the fact that a steamroller, which seems to be centred in American business, through the World Trade Organisation, is stopping us as a nation, and even through the European Union, withstanding genetically modified crops or growth hormones in beef, for example. Such things are being forced on us, and there seems to be little that we can do about it.

Ms Walley: My hon. Friend has put his finger on the exact pressure point. The great steamroller of the World Trade Organisation is telling us, and the European Union that, in the interests of world trade, we cannot develop policies based on the precautionary approach that I would want. There is a fundamental issue about whether democratic Governments such as ours can determine the way forward on food production, or whether we must follow multinational companies. Huge issues are at stake. I am pleased to bring to the House's attention the recent work of the Environmental Audit Committee, which is about to be published, in respect of multinational agreements on investment. I note with great interest recent calls by Sir Crispin Tickell for an environmental body that equals in strength the World Trade Organisation.

Mr. Anthony Steen: I agree with everything that the hon. Lady has said. In view of the problem, would not it be a good idea for every food item on the shelf to carry a warning in a big black box, just like on a cigarette packet, "This food contains genetically modified organisms"?

Ms Walley: I shall come to the issue of labelling later, but that is one proposal which could be considered.
I want to pre-empt a point that the Minister may raise. In October 1998, it was announced that a moratorium of sorts had been agreed, in that no
insect resistant crops will be introduced into the UK for the next three years.
That announcement was made before the Lords Select Committee by my right hon. Friend the Minister for the Environment, and led to headlines proclaiming, "Genetic crops banned".
As the Minister must surely be aware, no such crops would have been introduced during those three years anyway. Making such an announcement is like promising that the sun will not rise in the middle of the night. The only insect-resistant crop that might be ready for planting in that time scale is a maize made resistant to the European corn borer—and that would not be grown in Britain anyway. The Government should not try to confuse the issue with false proclamations of action. The issue is serious, and should not be obscured by "spin" in such statements.
As questions remain unanswered about the safety of GM crops in terms of their effect on human health, the testing regime that they are subjected to, their effects on wildlife and the wider environment, and the wider effects of the changes in agricultural practices that the use of GM crops will inevitably lead to, I am persuaded of the case for a moratorium; I hope that my hon. Friend the Minister is, too.

Mr. Lawrence Cunliffe: I fully support and welcome the moratorium. There is also a call at present—especially in the Council of Europe, where three

Committees are considering the issue—for a five-year freeze on genetically manufactured food and all its implications. That call is being made with reference to some 41 countries, which want further research on the subject. Would it not be wise, because of the wide implications of this technology, to support the moratorium with, technically, a five-year freeze? My hon. Friend knows that such a campaign will be launched; will she support such a policy?

Ms Walley: I certainly would. I am glad that my hon. Friend has raised the issue on behalf of the Council of Europe, because there has been concern in Europe generally about the decision by countries such as Austria and Luxembourg to take action against genetically modified crops, despite the fact that such action is illegal in the eyes of the European Commission. I believe that we should accept that the precautionary principle is central to everything that we do in this area. We now need to find ways of moving on. I hope that the Council of Europe will be an important partner in that debate, which involves the European Commission.
I want to impress on the Government the crucial importance of labelling and segregation schemes, which allow consumers to choose whether they eat genetically modified foods. However much people may differ on the rights or wrongs, or the risks and benefits of GM food, there is no question in my mind but that people should be entitled to choose for themselves. Surely we all have a right not to eat GM food.
I believe that support is solid throughout Europe. A Euro Barometer poll, carried out by DG XII last year, found that 82 per cent. of respondents in the United Kingdom wanted labelling. In other countries, it was the same story. In Denmark, the equivalent figure was 85 per cent.; in Germany, 72 per cent.; in Sweden, 81 per cent.; in France, 78 per cent. In case anyone thinks that I am picking the high numbers, the lowest score—for Ireland—was a 61 per cent. majority in favour of labelling.
Even Monsanto, manufacturer of many of these products and the firm that recently spent £1 million trying to convince the British public about them, headed one advertisement:
Food labelling. It has Monsanto's full backing".
The advertisement continued:
We believe you should be aware of all the facts before making a purchase.

Mr. Norman Baker: Does the hon. Lady agree that labelling, although terribly important, will be useless unless we can guarantee diversity of supply, and guarantee suppliers of food that their purchases are not genetically modified?

Ms Walley: I am grateful for that intervention; I shall come to that subject shortly. That point was made in a presentation that I attended 10 days ago. Producers that are now sourcing non-GM maize and soya from Brazil are in a real dilemma, because we are a very short planting season away from the time when those non-GMO supplies in Brazil will become GM supplies. There is a real feeling of urgency about that. I agree with the hon. Gentleman that labelling must be backed up by GM-free sources, as well as traceability and proper monitoring of that at all times.
I return to the subject of Monsanto, about which I sound a word of warning. Despite the fact that Monsanto has issued statements such as the one from which I quoted—with which I wholeheartedly agree—it was that company, I understand, which brought a court case in Vermont, USA to prevent the passing of a state law requiring the labelling of products made using one of its genetically modified products, recombinant bovine growth hormone, which is used on milk-producing cows. Monsanto invoked the US constitution to argue that it did not need to disclose that information, and won. So much for believing people that should be made aware of all the facts before making a purchase! To my mind, this country's freedom of information Bill cannot come soon enough.
The moral is clear: we cannot rely on Monsanto to take these decisions for us. It must be for the Government to ensure that foods made using genetically modified ingredients are labelled as such. The Government must ensure that there is a truly free market in which consumers can choose between GM and non-GM food.
Labelling regulation must be well designed, too. Current EC labelling regulations apply to just two genetically modified foods—maize and soya. Even with those two foods, the requirement is that
genetically engineered protein or DNA
is detectable. That definition excludes products containing oils, lecithin and other additives made from GM crops, as the DNA is not detectable in those products after the original foodstuffs have been processed. Products made with GM tomatoes, rennet or growth hormones also need not be labelled. That cannot be right. Foods in whose development GMOs have played any part—as a major or minor ingredient—must be labelled as such. So-called "identity preservation" schemes must be used to guarantee that GM-free foods are really GM-free. That is only fair to consumers who, as Monsanto says, should be aware of all the facts before they buy.
The rules must also be policed. Even the current limited and inadequate rules are not being upheld. Last week, trading standards officers in Worcestershire found that five of 24 samples contained GM soya or maize, despite the fact that only one item was labelled as such. That is unacceptable. The current laws must be enforced. In addition, we must consider the fact that the new EC directive does not apply retrospectively, and does not apply to food sources that were on the market before it was introduced.
I congratulate Bob and Carol Stevens, public analysts in Worcestershire, on the work that they have done to develop a technique for detecting genetically modified foods. Worcestershire's report is also to be congratulated. It exposes so well the fact that, although we have strict labelling laws, when it comes to GM food, we do not have truthful—I emphasise that word—labelling of foods. Consumers should be told. I hope that, in his reply, the Minister will take on board the recommendations of the director of environmental services in Worcester that he implements the provision of EU Regulation 1139/98 as soon as possible.
The Government must remember their duty to our wholefood industry, too. The Department of Trade and Industry should consider how it might protect that

industry when it faces the threat of its GM-free sources all but drying up, as more countries fail to segregate their GM and GM-free products, especially soya. I know that other countries' policies are matters for them, but I want at least to hear that the Government are actively involved in diplomacy and pressure abroad to protect supplies for an important sector of British industry. That is crucial.
Through highly resourceful sourcing work, the wholefood industry has so far managed to switch its source of soya from the United States, which stopped segregating, to Brazil. That guaranteed a steady supply for the industry's products and enabled it to continue to provide the GM-free produce that its customers wanted. However, Monsanto has opened a major plant in Brazil, and GM soya will shortly be planted by Brazilian farmers. There are fears in the wholefood industry that those crops will not be segregated.
If that happens, sourcing non-GM soya could become extremely difficult. The industry would be in a difficult situation, faced with customers who want GM-free products, but no ready source from which to obtain them. We could be as close as one crop-planting season away from such a changeover. I hope that the Department of Trade and Industry will take the matter seriously and work to protect our wholefood industry.
What pressure can be brought to bear to dissuade Brazil from going down that route? Having read a report, apparently by Stan Greenburg, on the significance attached by Monsanto to persuading the political elites in the United Kingdom to accept GM food, and having read a similar assessment entitled "The Grim German Mood: Biotechnology and Monsanto", I wonder what weight the new German Government will give to the issue when they take over the European Union presidency.
One political elite that seems to have swallowed Monsanto's propaganda is the House of Lords Select Committee, which published a report two weeks ago on GM regulations in Europe. Much was made of its endorsement of the technology, but I urge the Government to tread carefully, as the report contains some alarming discrepancies. I am not saying that the report was not carefully prepared, but we must examine its recommendations cautiously.
The most glaring concern is that the Lords consider that genetic modification "offers great potential benefits", although they accept that the risks are difficult to estimate. That begs the question of how the Lords weighed up the risks and benefits, while admitting that they cannot quantify one half of that equation. I am still to be convinced about who will really benefit from GM food.
Their lordships' approach to the precautionary principle is deeply worrying. They appear to explain that important principle in paragraph 41 of the report, discuss it a little further in paragraph 42 and do away with it entirely by paragraph 43, arguing for a step-by-step approach. I am conscious of our obligations under the Rio convention, and I want us to adopt the precautionary approach.
On segregation and labelling too, the report is confused. It states that
the use of GM products … is an ethical issue",
but goes on to support a system of labelling that would deny consumers the chance to make that ethical decision, by keeping them in the dark about whether foods contain GM produce.
The Lords have been ridiculed for claiming that genetically modified organisms have much to offer organic farming, yet it has been pointed out that organic farming does not allow any genetic modification at all. English Nature, the Government's official wildlife adviser, released a blistering attack on the report's failure to recognise the effect of GM crops on the UK's wildlife. In a new release, English Nature states that the Lords
failed to understand the implications for farmland wildlife of growing genetically modified crops … they say that these crops may benefit wildlife but there is no scientific evidence … to back this up.
English Nature went on to say that
the Committee has completely failed to grasp the point that applying broad spectrum herbicides to herbicide tolerant crops
will put
yet more pressure on our wildlife.
Those are all important complaints. I hope that my hon. Friend the Minister will accept that there are serious flaws in the Committee report. It fails to alleviate any of the concerns that I have raised and leads me back to my starting point—a call for a moratorium on GM crops in this country, and effective segregation and labelling of all GM foods.
I thank the Minister for listening to my concerns. There is little doubt that he and my right hon. Friend the Minister for the Environment, the DETR Minister most concerned with the impact of GMOs on the countryside, could well be the two Ministers who decide whether there is to be a large-scale release of GMOs into the British countryside—a release that we could never call back.
Why risk that nightmare approach? Why risk too much for a technology as yet unproven? It seems that companies such as Monsanto have to take risks on acquisitions of companies that are currently making low profits, but which have high share prices because of the potential in genetic engineering. If it is true that Monsanto is paying $2.3 billion for 60 per cent. of DeKalb Genetics, even though the company made only $29 million profit in 1997 and $28 million in the first nine months of 1998, perhaps it is more vulnerable than its image in the UK might suggest.
I urge my right hon. and hon. Friends at MAFF, the DETR and the DTI to balance all the interests—the interests of companies such as Iceland, which has kept faith by offering consumers real choice and whose technical director is at present advising consumer groups in Australia; ethical independent wholesalers that genuinely offer quality labelling to strict vegetarian or Soil Association labelling standards; the Restaurateurs Association, which is concerned about the practical implications of labelling GMOs in restaurants, and about the verification of the accuracy of wholesalers' food labelling.
I hope that the debate today will strike a chord with people who care about these matters. The genie is not out of the bottle yet; we just about have time. I urge my hon. Friend, through the Green Ministers group and the Ministerial Committee on the Environment, to work with his colleagues at the DETR, the DTI and the Department of Health, and to work in Europe and at the World Trade Organisation to develop policies that will implement the precautionary principle to guarantee food safety, food quality and environmental sustainability. I hope to report back to my constituent in Middleport that I have passed on her message.

Mr. Anthony Steen: We have heard a moving and powerful address from the hon. Member for Stoke-on-Trent, North (Ms Walley). I pay tribute to her for her good fortune in catching the Speaker's eye and initiating the debate. Because she has been so thorough, she has taken more time than she might have wished. Many Conservative Members support her general approach.
I have a particular interest in the matter. The hon. Lady may remember that I had the good fortune last July to have the last Adjournment debate before the summer recess. That debate was on the same subject. I pay tribute to the Minister for being in his place then and now to deal with such a complex subject.
My constituency includes the test areas where there was a tremendous fracas last year, when protesters, wrongly, tore up the crop and criminal prosecutions resulted. That shows the strength of feeling among many hundreds, if not thousands, of my constituents in the Dartington-Totnes area about those experiments.
There is no doubt that the United Kingdom leads the world in genetic engineering. Provided that such research is carried out carefully, we have nothing to fear. The trouble is that GM crop experiments seem to have gone ahead with enormous pace. The speed of developments, rather than the technology itself, worries the public.
Through GM crops we could create foods with a delayed spoilage time. We could, for example, grow corn in the Sahara and feed millions more people. There is an altruistic vision, not only dangers, associated with GM crops. Although there are understandable fears about the consequences if the technology develops too fast, it could be tremendously important for food production throughout the world and for feeding the hungry.
I agree with the hon. Lady that certain conclusions reached by the Lords Select Committee were incorrect, but I do not believe that they were the result of the Committee being over-lobbied by Monsanto. The Lords Committee believes that the benefits of GM crops outweigh the risks. That might be true in developing countries where harsh terrain makes it difficult to grow crops. However, in Europe, we already produce far more food than we can eat. Mountains of food paid for by the taxpayer are destroyed. It makes no sense to create more food, for which the taxpayer will pay more, that will subsequently be disposed of. I cannot see the logic of creating more food in Europe when we cannot eat what we produce already.
The Lords Committee said that a product need not be labelled if it contained below an established threshold of GM material. That is an invitation for manufacturers to buck the system. Those consumers who wish to eat non-genetically modified food will find themselves consuming products that contain traces of genetically modified material. What about the build-up of such material in the body over time if unlabelled genetically modified foods are eaten regularly? For that reason, I suggest that genetically modified food products should carry a warning similar to that found on cigarette cartons, advising the public that that food item contains genetically modified material.
Last week, I saw a sign displayed prominently in Sainsburys in Victoria street—I hope that I did not misread it—stating that the salmon on sale had been fed


with genetically modified material. It was interesting to note that the product appeared hardly touched. I believe that the marketplace will respond to such warnings.

Mr. Andrew Lansley: Did my hon. Friend observe that the House of Lords Committee examined the question whether intact transgenes could be absorbed by human DNA through food and reached the conclusion that those fears were unfounded? Therefore, does my hon. Friend accept that it is more important to look at the characteristics of the product and the impact that they might have on human health rather than concentrating on the technological process by which a food is developed?

Mr. Steen: As always, my hon. Friend raises a very challenging and interesting point. He might recollect that, for nearly a decade, successive Governments suggested that there was no danger associated with organic phosphorus sheep dip. It was believed that it could not possibly affect human beings. However, they have now discovered evidence to the contrary. At present, there is a scare involving Scottish salmon, which it is feared have a blood disease. It is believed that there is no chance of passing the disease to human beings, but how do we know what the effects will be in 10 or 15 years?

Mr. Lansley: rose—

Mr. Steen: I will not give way again—not because I do not want to, but because it is unfair to other hon. Members. Furthermore, I probably cannot answer my hon. Friend's question.
The House is concerned about the drip, drip, drip effect of genetically modified crops creeping into the food chain without people being aware of it, without proper warnings and without the correct tests. We want the Minister to confirm today that the public of this country will not be forced, without their knowledge, to eat genetically modified food. We must not find that, in 20 or 25 years, there is a new disease that could have been prevented and that the Government must answer any cases of negligence that arise. Future generations must not be at risk, mentally or physically. We do not know the answers to many questions, but we should not move forward on the basis of company profits that could affect the health of the nation. We do not know what effects genetically modified crops might have, so we must be cautious rather than sorry.

Joan Ruddock: This is my first contribution to a debate on genetically modified food, and I congratulate my hon. Friend the Member for Stoke-on-Trent, North (Ms Walley) on providing that opportunity. I have a long-standing interest in such matters: I studied plant pathology at Imperial college and did postgraduate research into genetics. I understand scientists' excitement about new discoveries and I support continued scientific endeavour. There is absolutely no doubt that the pursuit of science has made an enormous contribution to human life.
Every major scientific development—from the steam engine to the heart transplant—has involved both risks and benefits. Theoretically, genetic engineering is no

different: there are bound to be risks, but surely there must also be benefits. When the benefit is to human health, most people are prepared to take substantial risks. However, as my hon. Friend said, when it comes to genetically modified foods, public attitudes are hostile, with more than 70 per cent. of people opposed to the idea.
It is easy to assume that, perhaps, that opposition is caused by ignorance. The companies that promote such foods argue that if people understood the issues better, they would happily accept them. Perhaps the hostility comes from recent—although, for most of us, not direct—experience. We all know about listeria, salmonella and bovine spongiform encephalopathy. However, I believe that public concern arises from an innate sense that food is not just another commodity; it is the very sustenance of life. That is neither an ignorant nor a primitive belief—indeed, I believe that it is entirely rational.
Why, when the organic food market is growing more quickly than telecommunications or computer science, should we be forced to consume genetically modified foods? Are they good for us? The manufacturers' proudest boast is that there is no intrinsic difference; that we cannot tell the difference between GM and other foods. Therefore, I suggest that there is no intrinsic nutritional value in such food. Are genetically modified foods bad for us? Frankly, we do not have a clue. What is the justification for producing such food? We have heard some mention this morning, by way of intervention, of the likely benefits. They include higher crop yields, greater resistance to disease and the potential for good in the developing world.
I shall refer to the last point. Who, in this rich and well-fed country, would seek to deny better food supplies to those in the developing world? However, I do not believe for a minute that people in Africa are starving because of a lack of genetically modified foods. People in Africa are starving because of civil wars, all kinds of social and economic disruption and because of the failure of food distribution mechanisms. Those are the causes of starvation in Africa, not novel foods or the lack of them.
There are many things that we can do. Over the years, through cross-breeding and known and proven scientific techniques, we have developed better potential crops and better seed supplies. We can continue to do a whole host of things to assist the developing world. Achievements in terms of better yields and other developments can be attained by combining age-old cross-breeding techniques—which man and nature have used throughout the centuries—with sensible applications of agrochemicals in certain circumstances. But if big business argues that we need to develop genetically modified crops commercially for the sake of competitiveness and if the consumers want a mass market of cheap food, does it really matter? I believe that it does, because if genetically modified crops are grown commercially it will be impossible to isolate them from the wider, surrounding environment. It matters fundamentally, because there is no equivalence between genetically engineered crops and those that have been cross-bred by man and nature over the centuries.
The process of transferring genes from one species to another does not occur in nature, which is why genetic engineering is unpredictable, uncontrollable and, in my view, totally unnecessary. As Greenpeace has argued, no one knows what the long-term effects of eating genetically engineered food—day after day, year after


year—will be. Genes that have never been part of the human diet are in GM crops and foods, including genes from viruses and bacteria from those organisms. They may prove to be a severe risk to human health. Furthermore, they can, and probably would, change our environment irreversibly.
Genetically engineered organisms and plants are living things, so they can multiply and breed in the natural environment. They will go on breeding for generations to come. Herbicide-resistant genes that are transferred into crops, and which seem to be positive and advantageous, could also produce superweeds or superbugs if they spread.

Dr. Lynne Jones: A moment ago, my hon. Friend said that there was no evidence that genes transferred from one species to another. Now she says that there is a danger that genetically modified DNA—deoxyribonucleic acid—could be transferred from one species to the other. There appears to be some inconsistency there.

Joan Ruddock: Not at all. If genetic engineering occurs, the crop or the plant has a new genome and the potential for that crop or plant to cross-breed with another plant is present. The genetic engineering would have introduced the different DNA from the different species. Then there could be interbreeding between the same species.

Mr. Alan Simpson: Does my hon. Friend accept that there is considerable evidence about such transfers? Yesterday I read about research done in Denmark on transfers of herbicide resistance in oil seed rape into adjacent fields, of both crops and weeds. The fact that that is already happening strengthens her cautionary argument considerably.

Joan Ruddock: I am grateful to my hon. Friend, who makes a very significant point.
My hon. Friend the Member for Stoke-on-Trent, North warned of the alarming discrepancies in the House of Lords report. I add two more references to those cited by my hon. Friend. Most frightening is the assumption that safety can be established. Although I agree that labelling is absolutely vital, I cannot accept paragraph 187 on page 49 of the report, which says:
Once the regulatory process has ensured safety, the success or failure of the technology must be left to consumer choice".
There is no way of ensuring safety. It is utterly impossible.
We should label foods—as genetically modified or not genetically modified—but that does not, and cannot, mean that there is precise safety in taking genetically modified food off the shelf and eating it.

Dr. Gibson: Does my hon. Friend agree that we cannot be 100 per cent. safe with anything? The words that are used are "negligible risk". When the chief medical officer gave evidence to the BSE inquiry, he used the word "negligible", not the words "extreme non-risk".

Joan Ruddock: I agree entirely with my hon. Friend, but the report uses the words "has ensured safety". The Committee is talking not about "negligible risk", but about "safety".
In paragraph 186, the Committee says:
Genetic modification does not concern a single product or variety but will soon affect the whole spectrum of agriculture".
That is the truth about what will happen if we have genetically modified foods commercially grown in this country. That is why we cannot proceed on a case-by-case basis. We cannot ensure safety. The only certainty of commercial production of genetically modified foods is the uncontrollable and unpredictable release of artificially constructed gene pools into the wider environment. What does that say about our attitude to sustainable agriculture, to food safety and to public health?
The consequence of such a direction for our agricultural policy would be denial of choice to the consumer. That direction flies in the face of rational science and the clearly expressed views of the people of this country.

Mr. Norman Baker: I am sorry that the debate will run out of time for some hon. Members and I hope that the House will have a chance to return to the subject in due course.
I agree very much with one of the points made by the hon. Member for Stoke-on-Trent, North (Ms Walley): the whole development in this area is taking place without democratic support or involvement. It is being driven not by consumers, by Members of Parliament or by farmers, but by a small number of multinational companies. They will have profound effects on the food that we eat, the environment in which we live and the way that we farm our land. To me, that is a democratic deficit and I hope that the Government will address it, so far as they can.
I made that very point to the Minister of State, Ministry of Agriculture, Fisheries and Food at the Select Committee on Environmental Audit in July last year. He said, "We are not in the driving seat." That was an honest admission, and it was absolutely accurate, but I want to know today how he will try to get the Government into the driving seat.
I have far more faith in the Minister, and in the Minister for the Environment, than I have in the good folk from Monsanto, Zeneca and other such companies. I want the Minister, not people in America who belong to multinational companies, to take decisions on our behalf—please get in the driving seat. The Government have been well-meaning on this issue, but were slow off the mark in May 1997. I hope that they will take action to remedy that.
I believe in the precautionary principle. We must be careful to ensure that we do not do anything that cannot be undone. On that basis, it is up to those who wish to change our food and our environment to show that that is safe, or as safe as can be. It is not up to other people—me, pressure groups or any hon. Member—to show that something is unsafe. The onus is on those people to show that what they want to do is safe, but they are not doing that. Instead, they are cynically pushing through genetically modified food—and pushing GM technology on to this country, Europe and the world—without giving anybody the chance to object. They are doing that through deliberately avoiding segregation of supplies, and by trying to influence those who are opinion formers in society, while paying less attention to public opinion. That was shown by the Monsanto internal evidence. Indeed, Monsanto is so popular that, after it conducted its massive


publicity campaign, its own opinion poll showed that it was more unpopular than it was before that particular process took place.

Dr. Gibson: Will the hon. Gentleman give way?

Mr. Baker: I had better not. The hon. Gentleman has intervened twice and I am conscious that other hon. Members want to speak. I am sorry; I should have liked to allow him to intervene.
People have significant worries. One is the effect on biodiversity, which is a real worry, not a lunatic concern of fringe groups. The Royal Society for the Protection of Birds and English Nature—the Government's own advisers—are saying that there is a real problem. The Government have to take that matter seriously.
The Government appear to have concerns. The Independent on Sunday revealed the risks of genetic foods and tells us that, allegedly, a Government report, commissioned by the Department of the Environment, Transport and the Regions
concludes that there are insufficient safeguards to stop the creation of hybrid multi-resistant plants.
It lists a series of 'gaps' in the UK's regulatory framework, leaving Britain's wildlife at serious risk of damage from genetically modified plants and other intensive farming methods.
Where is that report, and when is it being published? There should not be commercial planting of GM crops until those issues have been dealt with satisfactorily.
The Government should commit themselves to a five-year moratorium on the commercial planting of GM crops. That is my party's position, and I am happy to be hosting a meeting in the House shortly about such a five-year freeze, which will involve hon. Members from all parties. The Government must also commit themselves to securing diversity of supply to ensure that people who want GM food can buy it with confidence. They must also ensure proper labelling. It is not sufficient for labelling to show GM material detectible after the processing stage: it must refer to inputs into food. At the moment, 90 per cent. of GM material in food processing does not require labelling, and is only picked up afterwards. That is wrong and misleading for the consumer, and must be dealt with by European Union laws.
When the biosafety protocol is discussed in a few weeks in Colombia, the Government must deal with three issues. First, on the issue of liability, who will take the blame and who will have to pay compensation if something goes wrong? Will it be the farmer—I am sure the farmer does not want that—the Government, the World Trade Organisation or the companies that are pushing GM food on us? Let us have a clear answer to that. My view is that the companies should be liable, and I hope that the Government will confirm that.
Secondly, will agricultural commodities, such as maize and soya, be included in the protocol? They are at present, and the Government should confirm that that will continue to be the case. Thirdly, it would be helpful if the Minister of State would tell us which Ministers will represent us in Colombia. Will he confirm that the precautionary principle will apply to the discussions in Colombia and to the Government's position?
In a parliamentary answer to the hon. Member for Wellingborough (Mr. Stinchcombe) on 21 January, the Minister for the Environment listed the research being carried out by the Government. I congratulate them on initiating that research, but it involves fundamental matters such as the environmental impact of GM crops, safety of plant viral inserts, investigation of feral oil seed rape populations, a review of GM bioinsecticides and a review of parasitic nematodes for biological control of invertebrates. The list goes on. That research is continuing, so we do not know what the outcome will be. How can we have commercial planting of such crops and release matter into the environment when we do not know the results of the research? That is bad science.
Those who argue that GM crops are wonderful and safe, and that we should go ahead with them, should wait. What is the hurry? Let us wait until we are sure. It is irresponsible rashly to go ahead before information on the test results has been published.
My message to the Government is that they are moving in the right direction, and I have confidence that they are trying to approach this problem sensibly and seriously, but they must get a hold on the debate. The Minister must ensure that he is in the driving seat. The Government should be prepared to take on the World Trade Organisation. The WTO must not be allowed to argue that trade is everything, because there are environmental and animal welfare considerations.
The Minister referred to the rules of the WTO, but they have not been challenged. Will he undertake to challenge WTO rules to ensure that we have freedom of choice, and to protect the environment and animal welfare? That is what the House and people in the country at large want.

Mr. Tony Colman: I shall be extremely brief, to allow someone else to speak. I support my hon. Friend the Member for Stoke-on-Trent, North (Ms Walley) on her suggestion of a short-term moratorium on the planting of commercially grown GM crops. That would be welcomed by all sides, including Monsanto and Dupont. I have spoken to those companies, because it is important that Members of Parliament engage with the companies that propose these changes.
I was honoured to be chosen to lead an Inter-Parliamentary Union delegation to the Food and Agriculture Organisation last December on the outcome of the world food summit. It is important to recognise the opinions of many countries in the group of 77. I back the views of my hon. Friend the Member for Lewisham, Deptford (Joan Ruddock). The almost unanimous view of the summit was that food security had remarkably improved worldwide in the past 30 years. Country after country from the developing world said that they had made major moves forward and were looking for food security—except those countries where there is civil war and other problems apart from those associated with growing crops.
It is important to knock on the head the idea that rapid change to GM crops is needed to feed the world. It is not. We must recognise the major changes in cross-breeding and the progress made in the work to find more orthodox solutions. There could be a big improvement in food distribution. Up to 80 per cent. of a crop may be lost between the farm gate and the consumer, so work could be done in that area.
I discussed the way forward with the FAO, which drew my attention to the codex alimentarius that it has undertaken jointly with the World Health Organisation in the past 30 to 40 years to establish a national register and examining board for all foods throughout the world, which is accepted as such. If we are to have a world standard, I strongly urge the Minister not to try to achieve that within the World Trade Organisation, but to work with the WHO and the FAO, which can ensure that all voices in the debate are heard, not just the biggest trading nations of the world.

Dr. Gibson: Does my hon. Friend agree that nothing will stop Uncle Sam in the drive to produce the foods America wants and to export them across the world? That is the problem. Whatever superstar status and agreements are reached, Uncle Sam will still push those products on to the market. There is no opposition to genetically modified crops or foods in the United States. Would my hon. Friend like to tell us why?

Mr. Colman: It is because the US Government have authorised these products. That was made clear in my discussions with Monsanto and Dupont, which almost felt hurt that we, on this side of the Atlantic, object to these foods. They believe that the argument was won 20 or 30 years ago. I suggest that this matter should be dealt with by the FAO and the WHO, because they have the appropriate mechanism. It is extremely important that the WTO is not involved, because the American Government have greater clout in that organisation than they do in the more egalitarian organisations, such as the FAO and the WHO.

Mr. Alan Clark: I pay tribute to the hon. Member for Stoke-on-Trent, North (Ms Walley) for presenting her case in a persuasive and well-rehearsed manner. I am sorry that, owing to the pressure of time, I must proceed directly to my conclusions.
I warn the hon. Lady that she will not get much change out of the Minister, although we know that his heart is in the right place. He will have to read out a speech written for him by officials. As we know, the Ministry of Agriculture, Fisheries and Food is primarily concerned not to defend the interests of the consumer, but to look after vested interests within its purlieu of responsibility. The hon. Lady spoke for the consumer. It is most important for the House of Commons to be vigilant and to defend the interests of the consumer, whether they be financial, economic or, as in this case, health.
The consumer is under threat from a double squeeze: the multinationals and their domestic equivalent, the superstores that sell food. There is an unholy combination between those two forces to cajole, intimidate or, by financial inducement, persuade consumers that they are perfectly safe, and if they quietly swell the profits of these two bodies they will be all right. Large investment has been put into that objective.
I shall address myself to the Minister, because I suspect that he privately sympathises with my view. The common agricultural policy should be wound up and the money saved should be devoted to getting organic farming properly and sensibly funded. It is obvious that labeling

must be introduced by legislation. It is hypocritical to say that the consumer must decide. How can the consumer decide if he does not know what he is consuming? The question of tariffs must be reconsidered. If organic, cleaner, better, more expensive and healthier food is to be undermined by cheap imports, some method has to be devised by the Government to level the playing field between what is possibly poisonous and what is clean.

Mr. Tim Yeo: I warmly congratulate the hon. Member for Stoke-on-Trent, North (Ms Walley) on introducing a timely debate. Both the subject and the thrust of her remarks have struck a chord on both sides of the House. I hope that we shall return to the subject soon, because many hon. Members wished to contribute at greater length than was possible and, indeed, I shall be able to touch on only one or two aspects of this important issue.
The Opposition recognise that genetically modified crops may have potential benefits, including the capacity to increase productivity in food growing and, possibly, to alleviate some of the environmental damage caused by intensive agriculture. However, more important and more urgent for the public than the potential future benefits are the clear and immediate dangers. Unfortunately, the Government's present policy ignores the actual environmental damage that the over-hasty adoption of the technology of genetic modification will cause. That policy appears to involve considering the health risks from genetically modified crops secretively and it fails to address the need to build up the public's confidence in what they are eating.
I shall deal first with the environmental anxieties. The United Kingdom differs markedly from the United States of America, where the farming areas and the wildlife areas tend to be separated. Here, in a smaller and more crowded country, farming practices have an immediate and substantial impact on wildlife. That alone makes a more cautious approach to the commercial release of GM crops essential. The evidence of English Nature to the House of Lords Select Committee sets out clearly the threat that GMOs pose to biodiversity and the genetic integrity of native species. If English Nature is to be overruled, the House is entitled to know on what grounds Ministers think they know better.
Does the Minister agree that the changes in crop management and farming practices that GM crops involve will have a substantial impact on wildlife? Should not the regulatory system examine the cumulative environmental impact of genetically modified crops and not just their effect on an individual basis? Should not the remit of the Advisory Committee on Releases to the Environment be widened to take fuller account of the effect of genetically modified organisms on biodiversity? Does the Minister accept that inserting genes into native species carries especially high risks and that very careful monitoring is needed of what happens after such organisms are released? Many other questions arise on this issue.
The Opposition fully support English Nature's call for a moratorium on the commercial release of genetically modified crops in Britain until the results of the current research on the environmental consequences are available. We believe that the European Union approval system for GMOs should be no less demanding than that for


pesticides. That would mean that even if a GMO was approved in one European Union country, it would still need specific approval from the British authorities before being released here, so that the circumstances particular to this country could be taken into account. I endorse wholeheartedly the concerns expressed on both sides of the House in this debate about the issues of segregation and labelling.
The health risks may be a little less clear, although for some members of the public they are of the most direct concern. In the past year, the Government have banned people from eating beef on the bone, even though the risk of dying from eating it is now estimated to be less than one in 1 billion. We must assume, therefore, that the Government are confident that the health risks of eating food with genetically modified ingredients are even lower. After all, in the case of beef on the bone, the customer is at least aware when he or she is running the risk. Because of the bewildering refusal of Monsanto and others to separate GM soya from the standard crop, customers do not necessarily know when they are eating food with genetically modified ingredients.
If the Government are so sure that GM ingredients carry no health risk, why are they covertly using the supermarkets to collect data on customers who buy GM products? Is it so that the Government can examine whether, for example, those customers subsequently contract cancer or give birth to malformed children? Those are only two of the sets of data whose collection was discussed by an official committee a few weeks ago. Are there, in the minds of the Government or their advisers, some risks to human health after all? Are the public now being used by the Government as unknowing guinea pigs in a vast but secret human experiment?

Dr. Lynne Jones: Will the hon. Gentleman give way?

Mr. Yeo: I am sorry, but I do not have time to do so.
The Government's approach is no way to build up public confidence; it is the reverse. Rushing ahead with the commercial release of GM crops while so many doubts remain unresolved will not advance the cause of GM technology. One of the mysteries is the Government's real aim. It clearly is not the protection of the environment, because they will not listen to the warning of their own statutory adviser on that subject. Their aim clearly is not the protection of human health, because they are trying to keep their fears secret. Perhaps the Government's aim is the service of those foreign-owned corporate giants whose commercial interests seem to depend so heavily on getting GM crops imposed around the world in the shortest possible time before too many awkward questions about the consequences of that imposition have been asked. We know that one such company, Novartis, was one of the 38 largest Labour party sponsors in 1997. It has been suggested that President Clinton personally lobbied the Prime Minister on behalf of another, Monsanto, although my parliamentary question on the subject remains mysteriously unanswered.
What is all the rush about? Here is an issue crying out for leadership and principles, not spin doctors and soundbites. But who do we find chairing the relevant

ministerial committee? None other than the Minister for the Cabinet Office, the right hon. Member for Copeland (Dr. Cunningham). Not surprisingly, the mood of confusion among consumers is now changing rapidly to one of anxiety.
I invite the Minister to recognise that winning public acceptance for GM crops will require more openness from the Government and more clarity about their aims. I invite him to accept that little would be lost and much might be gained by slowing down the process through which he and his ministerial colleagues are taking Britain into hitherto unknown realms. Those realms may one day bring great benefits, but they are best entered after ensuring that the risks involved have been fully understood by everyone who is exposed to them and reduced to an absolute minimum.

The Minister of State, Ministry of Agriculture, Fisheries and Food (Mr. Jeff Rooker): I congratulate my hon. Friend the Member for Stoke-on-Trent, North (Ms Walley) on securing this important debate, which is long overdue and welcome. It is the first proper debate on this subject in the past couple of years, notwithstanding the long debate on the last day before the summer recess when only three or four Members were present. That was more on constituency matters and related to seeds and trials.
The previous speech, which I assume was made with the full authority of the shadow Cabinet, makes it necessary for me to respond to the allegations of the hon. Member for South Suffolk (Mr. Yeo). He said that there were clear and immediate dangers, but there is no evidence of that. He said that the process by which the Government consider biotechnology is secret. Since we came to power, we have appointed non-scientific lay advisers to every advisory committee that serves the Government in that respect. It has usually been two people, and they are all encouraged to network with each other and are not used as tokens. The minutes and agendas of those meetings are made public.
The Advisory Committee on Novel Foods and Processes, the key scientific committee on this issue, was set up in 1988 and has an ethics adviser. Last year, after discussions with me, it held two open meetings—last February and in December—with outsiders such as Greenpeace and the Consumers Association to discuss the issue. Observers and non-members were allowed to speak, and did not only sit mute. The minutes were published, but the hon. Member for South Suffolk says that it is a secret process.
We have published a list of 59—at the latest count—suppliers of non-GM soya and maize for food producers to contact in America, Canada and Holland. That is an initiative of this Government. A new Cabinet Sub-Committee is examining the whole issue of biotechnology across Government so that decisions are not made jigsaw fashion but from the big picture. There has been no coercion of supermarkets. No attempt has been made, by this Government or any of our officials, to get individual details of customers' food buying. That was never intended or discussed at the individual level.
I thought that it would be useful to remind myself about labelling, but I did not realise how useful. It is nearly two years since the general election. I well remember the


decisions that Ministers take that lead to changes. It was probably late May 1997—the press release was on 7 June—when we changed labelling policy. When we came into office, we examined policy areas. We discovered that our officials in Brussels were under instructions from their political masters in the previous Government not to agree to the labelling of GM ingredients in foods. In practice, that would have meant that none of the foods currently on sale would have been covered by the labelling policy that that lot promoted when they were in government. We were again in a 14:1 minority.
Following discussions, this Government immediately changed the instructions to the British negotiators not only to get in line but to get in the lead on the issue. We put consumer interests first and foremost. No one can deny that, because the labelling regulations that have come through now are totally different from what has operated in the United States of America. The previous Government's labelling policy was, in practice, exactly the same as that which operated in the United States: not to label ingredients separately. That policy has been reversed. There are defects, which have often been raised in House. There are some loopholes to be closed. Additives and flavourings will have to be labelled, which the European Union is addressing. That must be dealt with. I am still in some difficulty on the process of manufacture. Labelling ingredients is one thing, but labelling for manufacturing processes is different because it transcends foods and goes into other products. It is a different regime.
We have just issued our consultation document on labelling for the catering sector so that it will be covered. I invited some catering sector bigwigs to ask them whether they really wanted GenetiX Snowball queueing up outside their restaurants telling customers that if they eat in them, they will not be told whether ingredients are genetically modified. The answer was, of course, no. We have consulted once already, and we have been consulting briefly over the past four weeks to get agreement before introducing regulations.
The House of Lords report was mentioned by everyone who spoke. I cannot respond on that. I and my right hon. Friend the Member for Oldham, West and Royton (Mr. Meacher) gave evidence to it in October. In the normal course of events, the Government will respond within two months.
There is no commercial growing of GM crops in this country, and none is planned. When it happens, its introduction will be controlled, not a free-for-all. Farmers, manufacturers and seed merchants will not be allowed to plant acre after acre willy-nilly without controls. It is not possible and it will not happen.
This Government have doubled aid for organic conversion. From April, there will be new subsidies to persuade people to convert. We have doubled the money

for organic research. We will not waste that public money by allowing contamination from the uncontrolled introduction of GM crops.

Mr. Alan Simpson: I congratulate the Minister on toughening labelling regulations. In his current consultations, is he pointing out to the biotech industry and food retailers that under the Single European Act and the Food Safety Act 1990, the responsibilities of due diligence and product liability mean that they had better have full and unlimited public liability insurance against the class actions that will follow from BSE, and, almost certainly, on other matters?

Mr. Rooker: I am grateful to my hon. Friend, who I know has a question on this at tomorrow's Question Time. Civil liability for damage caused by genetically modified organisms is governed by common law developed in the courts. On the basis of common law principles, the firm holding the marketing consent for the GMO crop can be held liable in law for any damages arising from ill effects attributed to that crop. As I made clear in a scrutiny Committee upstairs, the Government support the proposal in the European Commission Green Paper on food law to extend product liability to primary agricultural producers. There could not be a clearer warning to companies that if they have any doubts, they should not apply.
We are being rigorous with our regulation to the extent that if we and our advisory committees do not agree that a product should be approved, we will say that it has not had approval. Unlike, for instance, the Veterinary Products Committee, we are not constrained by the Medicines Acts in saying which products have not been approved. People hear only about the products that have gone through the system and assume that everything gets approved. That is not true. We will publish the minutes. There is no commercial confidentiality on this. If someone does not get through the system, we will name the company and the product so that people understand that we are not rubber stamping every application willy-nilly. It does not work like that.
I regret that I have no more time to answer the many positive points made by hon. Members. I hope that I have at least partly answered the disgraceful, outrageous speech made on behalf of the shadow Cabinet.

Mr. Eric Forth: On a point of order, Mr. Deputy Speaker. Can you confirm whether you have had a request from the Prime Minister to explain to the House his role in hounding someone out of his job because of his political or religious beliefs?

Mr. Deputy Speaker: That is not a point of order for the Chair. No such request has been received and the Prime Minister is due to answer questions this afternoon, when there may be an opportunity for hon. Members to ask whatsoever they may choose.

London Fire Service

11 am

Dr. Vincent Cable: First, I must thank you for giving me the opportunity to introduce this Adjournment debate on the London fire service, Mr. Deputy Speaker. I introduced a similar debate a year ago and it is appropriate that the House should have an opportunity at least once a year to focus on the problems of that service. It is not a major public service in spending terms when compared with the national health service or education and it accounts for one third of 1 per cent. of all Government spending. However, it is a key service and one in which men and women risk their lives in our interests. Their concerns deserve proper attention.
I have not introduced the debate simply to create an annual ritual of reviewing the problems of the fire service in London; I have done so because the financial problems and cuts in the service with which we dealt last year have continued unabated. Last year, the debate took place in the context of the closure of two fire stations, Downham and Shooter's Hill, with the loss of 56 jobs. This year, the position is not entirely clear, but it seems likely—even if one is being fairly optimistic—that we will lose five fire engines and another 115 fire jobs as part of a process of cuts and economies in the fire service in London. That is the context and the motive for this debate.
The Under-Secretary of State for the Home Department, the hon. Member for Knowsley, North and Sefton, East (Mr. Howarth), responded to the debate a year ago and is to do so again today and I acknowledge that there are positive aspects. It is obvious that he has been defending his corner in his Ministry and in Whitehall debates about funding. The standard spending assessments for the past two years—1998–99 and 1999–2000—of 4.7 and 3.9 per cent. respectively are above the rate of inflation, which is a positive outcome. It compares favourably with the previous four years, when the settlements were about half the rate of inflation.
That torrid period in the mid-1990s created many of the serious problems in the service. The annus horribilis of the London fire service was 1997, when 12 tenders were withdrawn and people like me, with no background in the service, were drawn into the campaign to save our local fire engines. The problems have continued and, although the Government deserve some credit for having granted relatively favourable settlements, the underlying structural problems, notably the overhang of pensions and flexibility in the service, have not been tackled. I have no doubt that they are in the pipeline. The fire service is in continuing difficulty in London because the problems have not been tackled. I hope that the Minister will point the way forward.
The immediate crisis has come about because the London fire service is totally constrained in several ways. It has limited freedom of manoeuvre and is a single-service operation. First, it is constrained on the pay front. Half its costs are salaries and, although the SSA settlement has been reasonably generous, next year's 3.7per cent. SSA does not begin to compare with the pay settlement, which is 5 to 6 per cent. I do not begrudge the firemen their pay increase—I am sure that they deserve it—but there is no obvious mechanism by which that pay award can be paid for. The assumption is that the money will come from efficiency savings, but in practice those

mean cuts in the fire service. After years of economies and cuts in overheads, that is primarily where such savings have to be made.
The second constraint is the pension problem, and I am sure other hon. Members will refer to it. The problem of unfunded pensions exists in several public services, but it is probably most acute in the fire service. Pension obligations are rising at twice the rate of inflation. About 20 per cent. of the fire budget goes in pension obligations and the percentage is rising every year because of the increasing number of fire service pensioners. Firemen are living longer, which is welcome, and the contribution rate is falling because fewer people are on the staff. It is a vicious circle whereby the more the service is cut, the fewer people are left to contribute. It is a downward spiral and it is creating an unsustainable financial position. I understand that the pension obligation will rise towards 30 per cent. of the budget in the next few years. That is a hopeless position and it is causing immediate pressure.
Reserves are a third constraint. In the past year or so, the fire service has been kept at a respectable level of service because it has been able to dip into its financial reserves. It drew £12 million last year and could probably draw some more this year. Out of the £7 million or so that is left, it could draw £2 million to £3 million more to remain roughly within sight of what the Government auditors consider financially prudent. Clearly, however, that cannot continue, unless the Government intend to hand the service to the London mayor with no reserves, which would be extremely dangerous. For example, an unforeseen increase in pension obligations would leave it illiquid and unable to meet its day-to-day obligations.
I do not fully understand the final constraint and I hope that the Minister will explain it. It is the way in which the new Government clawback arrangements for the so-called more sensitive form of capping that has been introduced will operate. I understand that the Government have said that they would tolerate a 4.5 per cent. increase in the precepting for local councils in London. I am not entirely clear what would happen if the fire service breached the ceiling. We are in new territory and I am not sure whether, when the Government introduced the new system, they had fully thought through what it might mean for precepting authorities, as opposed to normal, multipurpose councils. The new system has created significant uncertainty and difficulties for the service and I hope that that will be clarified during the debate.
Those severe constraints are hemming in the service. In the current and the coming financial years, even if the fire service draws down much of its reserves to a level that is verging on financial imprudence, uses the savings from last year—there were small savings because pension obligations were not quite as large as had been budgeted for—and breaches the Government's target for precepting up to perhaps a 7 per cent. increase, it will still have to close five fire tenders down. The situation could be worse. That is my analysis of the situation. What are the alternatives and what else could be done? Could the problems be avoided?

Mr. Geraint Davies: One of those stations is in New Addington in Croydon. In recent times, we have lost a station in Sanderstead and engines in Warlingham, Beckenham and Woodside. As the hon. Gentleman said, the situation is not sustainable. It is gradually leading to the degradation of the service.


Does he agree that one way forward would be to ring-fence the pension side of expenditure and have separate funding for the service, so that pension obligations do not undermine the provision of fire engines?

Dr. Cable: The hon. Gentleman's suggestion is sensible and it is one of several that I intended to propose to the Minister. There are different ways of dealing with the pension problem and the hon. Gentleman correctly identified one. The local colour that he has added to the debate from Croydon is appropriate. I hope that other hon. Members will give from their areas examples showing how the position is causing alarm throughout the capital.
Before dealing with that point, however, I shall run through the options available to the fire authority to head off the cuts under the present financing arrangements. They are all extremely unpalatable. One option is to run the reserves down to zero and pass on a hot potato to the new London mayor. One can imagine the mayor's problems, faced with a bankrupt fire service and having to trade off its problems against those of the Metropolitan police. That is an unpalatable option, but it needs consideration.
A second option is to break the bank in terms of capping limits and go up to a 10 or 11 per cent. increase in precepting. That would not involve an enormous cash increase for local councils, but it would be extremely unpopular with them. It would also test to breaking point the Government's belief that a clawback system should be applied to authorities that breach limits, and I suspect that the Government would not be able to let that happen.

Mr. Simon Hughes: The bill received by local council tax payers in London shows separately the precepted amounts for both the Metropolitan police and the London fire and civil defence authority. Because people value the fire service as they do the police service, the politics of raising money suggest that an increase in precept would be one method that would appeal to the Government, if they were willing to accept it, and be acceptable to the people and to local authorities. People want the fire service and would be willing to pay a relatively small additional sum on a relatively small part of the total council tax bill. It strikes me that that way forward in ensuring that the fire service receives the resources it needs would be the easiest to deliver.

Dr. Cable: I thank my hon. Friend for that constructive suggestion. However, if the cuts crisis is to be avoided through precepting, the increase would have to be fairly substantial, in the order of 12 per cent., and it would require forbearance on the part of the Government. Perhaps the Minister will offer clarification on that point.
Drawing the threads together, I ask: where are the cuts leading? At what point do fire services become dangerously overstretched? This year, the fire service management have clearly gone to some trouble to prioritise firefighting equipment, through risk assessment carried out in a professional manner. They will argue that the five fire tenders identified are those whose loss will put the public least at risk, and that all sorts of improvised arrangements of that nature have to be adopted. However, there is a point at which such arrangements become positively dangerous.
I am no expert, but simple common sense dictates that, in the event of a major emergency or combination of emergencies, the fewer fire tenders and firefighters there are, the greater are the response times and the risk of death. The professional management of the fire service now believe that, if cuts in excess of the five now contemplated are made, we will not be in merely difficult territory; real danger will threaten the public. The Fire Brigades Union, which is more outspoken than the management, already believes that the increase in fire deaths—in 1997–98, the number increased from 67 to somewhere in the 80s—is probably attributable to the fact that fire cover was reduced. I am not sure whether that can be proved, but the figures are not encouraging.

Mr. John Randall: Does the hon. Gentleman agree that it is not only the public who would be put at risk by the reduction in services, but fire crews themselves?

Dr. Cable: That is absolutely right and an important point. Unfortunately, disasters such as the King's Cross fire appear to be needed to remind us all of threats, not only to the public but to fire officers. In addition, although the fire service is right to have refocused its priorities from property to people, risk to property remains an element of concern.
Let me now outline some of the longer-term problems that the Government will have to address if the overall difficulty is to be alleviated. The first is the pensions problem. I have already sketched the difficulties, and most hon. Members already know the underlying problem. The difficulties started in the post-war period, a relatively easy period in which far more money went into the fire service pension scheme through contributions than was taken out. It is not altogether clear what happened to the surplus, but I suspect that, instead of being spent on the fire service, it leaked out to the Greater London council and was used to permit lower rates around London. We all had an apparently free lunch at the expense of the London fire service's pension provision, but we have now reached the point of having to pay the bill.
The pensions problem is wholly unsustainable, because contributions are likely to fall further. The Government have begun to address the issue of pension arrangements for new recruits to the London fire service; that is a creditable effort, but it does not deal with the problem of the pensions overhang and it may make the existing problem worse. New recruits may opt out of the pension arrangements and cease to pay their 11 per cent. contribution, which would result in lower overall contributions at a time when pensions outgoings increased because of longevity and redundancies. The problem will get wholly out of control if something is not done.
What are the options? The hon. Member for Croydon, Central (Mr. Davies) suggests that, within the SSA arrangements, pensions should be isolated from the rest of the budget and, in effect, be reimbursed by central Government. That would take pensions out of the internal financing arrangements of the LFCDA, which is my preferred option. A second option, which builds on the suggestion made by my hon. Friend the Member for Southwark, North and Bermondsey (Mr. Hughes), is to rely more heavily on precepting and to allow pension costs to be passed on to local authorities without restriction.
Various methods are available, but it is clear that the Government have not yet proposed a method of dealing with the pension problem. It is one thing to deal with new recruits and prospective pensioners, but the real financial difficulty arising from pensions has not yet been faced. I hope that the Minister will take the opportunity of this debate to address those problems.
My final point relates to the fire service's overall operational flexibility. The fire service management believe that their financial position would be easier if they were able to operate more flexibly. They are governed by a set of legislative regulations that has accumulated over the years. That severely inhibits their freedom of action, for example, in charging big business for fire prevention services, which appears in principle to be a reasonable thing to do. It also inhibits flexibility in other ways: it is a proper part of the Government's approach to social exclusion that the fire service should refocus its efforts on deprived areas, which are where most fires occur, but that sort of operational flexibility is currently inhibited by restrictive legislation. In last year's debate, the Minister said that he was willing to look at that legislation and to introduce a new fire Bill. 1 should be grateful for some information about when that will happen, how it will happen and what mechanism will be used, for that is an important part of the story.
I suspect that the House is of one mind on the fact that there is a serious short-term problem. I should like to know how the Government propose to deal with it, especially in matters, such as capping limits, where the Government have a responsibility. I should also be grateful if the Minister revealed how the Government intend to address the longer-term problems of pensions and fire service flexibility.

Dr. Rudi Vis: I accept much of what the hon. Member for Twickenham (Dr. Cable) says and I shall try not to repeat his remarks, because that would be boring. Instead, I shall ask why the London fire and civil defence authority is affected by impending crisis.
Mr. Robinson, the chief fire officer and chief executive of the LFCDA, has informed us of the many financial difficulties he faces. Unfortunately, neither the LFCDA's financial figures nor the measures taken to stabilise them add up. The hon. Gentleman is correct to say that we may be here again next year if we allow the LFCDA management to continue to act as they have until now.
When Mr. Robinson was appointed, he must have accepted the job on the basis and the understanding that he had to run an efficient and safe fire service. I doubt whether he said that, although he would do that, he would not take account of pension arrangements; my guess is that he accepted those responsibilities.
In a letter sent to hon. Members in December, Mr. Robinson sets out the main problems. The pension scheme is unfunded; when it was started, in 1947, income was high and expenditure low, whereas last year expenditure was £77 million and income was only £16 million—a pound;61 million shortfall.
When did that start? As the hon. Member for Twickenham said, it started in the 1970s. My dog could understand the problem, if I told him about it. What has

Mr. Robinson done to change the system from an unfunded scheme to a funded one? Absolutely nothing: neither he nor his predecessors took the necessary management action. So what does he say now? He says that a funded scheme for new firefighters could be a solution only in the long run—but if the process had been started in the 1970s, we would now be well into that long run and the problem would have been avoided.
The cuts in the fire service began just when expenditure started to exceed income. Since 1979, a lot of equipment has been lost, but the problem has not been solved, merely avoided. That is a management failure. What does Mr. Robinson propose to do? He proposes to make another 50 or 60 people redundant, or more, depending on the circumstances. What will those people do? They will draw pensions from the scheme, thus making the problem worse. That is not a solution—just the opposite.
Mr. Robinson also intends to make savings in the support areas. In a letter, he stated that 86 per cent. of income was spent on front-line services. However, the same letter stated that the service spent 21.4 per cent. of income on pensions. Subtracting 21.4 per cent. from the 100 per cent. income total leaves a remainder that is too small: it is not possible to spend 86 per cent. of income on fire services. The figures do not add up.
Mr. Robinson has said that the management structure has been changed. It is hard to imagine, but there used to be five layers of management. Now there are three layers, but that is still far too many. London's fire service has a military structure. Even in television programmes such as "London's Burning", one can see firefighters, grown men and women, touching their forelock to management. My goodness: everyone is afraid. Top managers have bigger cars, bigger offices and more assistants. The fire service has less to do with fires than with management. Priorities are upside down.
I am a Dutchman by birth, and I maintain that we could learn from the way things are done in the Netherlands. There, some pertinent questions would be asked, and the answers would provide the basis for action. What is the service for? It is a fire service. What does it do? It fights fires; it helps people in flats; it helps to get people out of lifts that do not go up or down; it helps in dealing with road accidents; and all sorts of other things.
Depending on the relevant regulations, the management should have ensured that there was income to cover the service's activities. In the Netherlands, a structure was built to allow the service there to fight for the necessary income. The LFCDA does things differently. The management structure comes first: only when that is in place does attention turn to fighting fires. That is the wrong way around. The LFCDA is not doing what it should be doing.
I have read the budget proposals, but they contain not a word about expenditure on civil defence, which is part of the LFCDA's responsibility and would have to be covered in any honest overview. Why have we not been told about civil defence?
It is a scandal, but it is common now to see a gleaming little car arriving at the scene of a fire. Who gets out? A management person. What does he know about fires? Nothing. He says, "Oh, my goodness, that's a fire." The management person stands there for about 10 minutes and then asks the firefighter in charge when it will all be over. On being told that it might take about two hours,


the management representative assumes that everything is under control and that he can go home. Why does that happen? The answer is that the management person is paid out of money for front-line services. That element is hidden in the budget, but we must not forget that. To my mind, it is unacceptable.
Why must firefighters retire at the ridiculously young age required? I know of many who are totally fit, as medical supervision proves. They want to go on working, either on active service or at desk jobs, but there is almost no way for existing firefighters to get into management. The structure is one of "us and them", and the management do not want them.
The LFCDA has protested that it has consulted all relevant people and groups. Has any firefighter been consulted, or been involved in any way? The answer is no. If I want to meet firefighters, rather than just go to head office, I have to ask it for permission. The situation with the LFCDA management is unbelievable. If my house should catch fire, I would want firefighters to come, not management.
The financial problems are severe, but the solutions are idiotic. In the literature that he has sent, Mr. Robinson states that overheads will be shared with other emergency services. There has just been a massive change in the police structure in Barnet, but the LFCDA did not get in touch to offer to share the overheads involved in reorganisation, which it could have implemented at the same time. No contact was made.
Changes to the north circular road mean that Finchley fire station is poorly placed. However, other emergency services have a very much better site near Finchley high road. Has the LFCDA taken up that option? It is considering the matter, and doing so in such a way that one might think that it may be working to that end; yet the budget report has details of cuts that have been made in ancillary services. More than 50 per cent. of personnel in the LFCDA property division—the authority's asset management arm—have been kicked out. Those are the very people who should talk to other emergency services about saving money—proper money, not improper money—but there has been no negotiation at all.
I believe that the LFCDA management are not capable, and that Mr. Robinson should go. In addition, I contend that its political control must be examined. Every year, three or four of the 32 councillors who represent London's boroughs are caught out. The other 28 councillors are very sympathetic, but what they are thinking is, "Thank God, it's not me this time." The result is that votes are held and cuts are approved in all the areas for which they are proposed. There should be an independent inquiry into the inefficient and irresponsible management of the LFCDA.

Mr. Jim Fitzpatrick: I congratulate the hon. Member for Twickenham (Dr. Cable) on securing this Adjournment debate. I have been trying to do the same, but he beat me to the punch in the ballot in November 1997, and he has done it again this time. I also congratulate him on getting here today. Yesterday, he was feeling distinctly unwell, but it is clear that the adrenaline has kicked in to enable him to open the debate so effectively.
I prepared for this debate by reading the Hansard report of the 1997 debate. That was an important debate, as is today's. I am sure that all hon. Members in the Chamber hope that we will not need a similar important debate next year.
I was a member of the London fire brigade for 23 years, and I belonged to the Fire Brigades Union, so I have some familiarity with the service and its problems. However, I congratulate the LFCDA on the quality of the briefings that it has sent to the London Members of Parliament. Those briefings helped us to identify the exact nature of the problems that the authority has to face.
I shall deal with some general issues, before reinforcing the financial concerns—specifically about pensions—raised by the hon. Member for Twickenham. My starting point is different from that of my hon. Friend the Member for Finchley and Golders Green (Dr. Vis): I believe that the fire service is extremely efficient. It received a glowing report from the Audit Commission in 1995, and last week's report and performance indicators show that the London brigade is operating at 91.5 per cent. efficiency.
That has happened against a backcloth of reductions since the Greater London council was abolished in 1986. The fire authority then assumed control of 10,000 staff, but the number has fallen to between 7,000 and 7,500 since then. Fire stations have been closed, appliances withdrawn and cuts made in various departments. Pressure has intensified year on year. Now we are threatened with the withdrawal of five more pumps this year.
All that has produced a consensus of disquiet stretching from the chief fire office, Mr. Robinson, to the councillors elected to the fire authority and the trade unions, the principal of which is the Fire Brigades Union, which represents operational firefighters. Despite the proud record of the London fire brigade, and of the fire service in general, the number of deaths and injuries in London and throughout the country has consistently been too high.
Most people understand that the politics of fire fit tidily with the Government's social exclusion initiatives, in the sense that the vast majority of people who die from fire are from the most vulnerable groups—the old, the sick, the poor and the disabled. There are distinct parallels between the Government's attempts to deal with social exclusion among the most vulnerable groups and what the service is trying to achieve by being more flexible in its responses. I commend the London fire brigade pilot scheme that is attempting to introduce smoke alarms to the Bangladesh community in Tower Hamlets, the Asian community in Ealing and pensioners in south London. Those are ways to improve precautions and safety in vulnerable communities.
A general difficulty for the fire service has been that the legislation creating it or allowing it to function has almost always been reactive rather than proactive. Even most recently, legislation has resulted from Hillsborough, Bradford and King's Cross. There is a powerful lobby for a new fire safety Act, and I know that the Under—Secretary of State for the Home Department, my hon. Friend the Member for Knowsley, North and Sefton, East (Mr. Howarth), has been working on that. Such an Act could help brigades, including London's, by making it easier for business to understand and implement fire safety precautions; consequently, it would be easier to monitor and enforce those requirements.
As the hon. Member for Twickenham said, brigades such as London's have no opportunity to generate income from their expertise in training or fire safety. Such an opportunity would allow them to raise money to address their financial difficulties. The LFCDA is asking not for handouts from the Government, but for the power to help itself.
The main problem is the pension fund. Some people, including the hon. Member for Billericay (Mrs. Gorman), have said that pensions are too generous and expensive. Anyone who has studied the fire service will know that its occupational pension scheme has been an appropriate acknowledgement of the nature of the job and the sacrifices and dangers involved in it.
However, there is a problem. When the fire service pension scheme was introduced, few people lived to collect their pensions. Contributions from firefighters went to local authority expenditures. Now, however, as a result of the shorter working week, health and safety changes and breathing apparatus, firefighters live to normal life expectancy rates. That is what makes the scheme expensive. There are today more retired firefighters from London than there are serving firefighters. The pressure on the pension scheme is intensifying.
The Government have considered the problem. In a written parliamentary answer on 31 March 1998, at column 466 of Hansard, my right hon. Friend the Home Secretary said that he sought views on the fire service pension scheme before 31 July 1998. On 6 November 1997, the Under—Secretary of State for the Home Department, my hon. Friend the Member for Knowsley, North and Sefton, East, said that there could be no quick fix:
Any solution must be a long-term solution".—[Official Report, 6 November 1997; Vol. 300, c. 478.]
However, the problems of the fire service pension scheme have existed for 10 or 15 years. The Tories did nothing, and we are grappling with them now. Even a solution to the problem of expenditure now running at 20 per cent. of the fire authority bill would not sort out the authority's financial difficulties for 20 years. The pressure is immediate, and it needs immediate attention.
My hon. Friend the Member for Hornchurch (Mr. Cryer) has tabled an early-day motion showing the clear cross-party support for action on the pressure on London fire brigade. I have outlined to my hon. Friend my misgivings about some words in his motion, but it rightly identifies the pension scheme as the critical aspect.
I congratulate my hon. Friend the Under-Secretary on last year's 3.9 per cent. increase in fire service expenditure. However, there was a 5.6 per cent. wage settlement, and, since wages account for 80 per cent. of the budget, that meant more pressure on the budget. London fire brigade's pension bill for this year is £77 million, and contributions are only £16 million. The retail prices index has risen by 60 per cent. since 1986, but the London fire brigade pensions bill has gone up by 284 per cent.
I commend the chief fire officer, the politicians on the fire authority, the Fire Brigades Union, the other unions and the public for highlighting the problems that cause us

to debate the problems again today. I level no criticism at individual Ministers, or even at the Home Office. The reality of our predicament is that the fire service budget amounts to less than 0.3 per cent. of public sector expenditure, making it extremely difficult for us to receive the attention that we believe the problems deserve.
Most fire safety legislation is, as I have said, reactive. I hope that we do not need a disaster, as some people have said, before we can acknowledge deterioration in the service. The warning signs are there—from principal officers and from firefighters on the ground, showing that there is unanimity in the service. None of us wants to be able to say, "I told you so." There are solutions to the crisis facing the fire service, and facing London fire brigade in particular. I hope that the Minister can persuade the Home Office and the Treasury to grasp a difficult nettle.

Mr. John Randall: I shall be brief, as many other hon. Members want to speak in an important debate. I congratulate the hon. Member for Twickenham (Dr. Cable) on obtaining the debate and allowing us to air our views. It is a pleasure to follow the hon. Member for Poplar and Canning Town (Mr. Fitzpatrick), whose knowledge of and passion for the interests of firefighters and fire safety are well known throughout the House. I pay tribute to firefighters throughout London. We all know that they risk their lives daily in our cause.
In the London borough of Hillingdon, two pumps are threatened. One will be transferred from Hayes to Heathrow, and the other, at Hillingdon fire station, will be lost. There is all-party support in the borough for the retention of those services. I pay tribute to Councillor Anthony Way, who has actively represented the borough on the London fire and civil defence authority—I should point out that I am paying tribute to a Labour councillor. People are alarmed at the potential loss of those pumps.
It is difficult to understand how anyone can believe that such a decision will not increase the risk to the public. I have lived in the area all my life and the Hillingdon station—previously at Uxbridge—has always had two, if not three, pumps. In those years, the potential risks have increased. We have Heathrow, RAF Northolt, Hillingdon hospital, the rapidly expanding Brunel university, and a large shopping centre at Uxbridge, with another being built. It is difficult to understand how a 50 per cent. reduction at the Hillingdon station can be anything other than detrimental to the safety of my constituents and those of other hon. Members representing the London borough of Hillingdon.
The problem should have been considered earlier; it is not new. My constituents' views and those of all the hon. Members who are here today mean that the problem must be addressed. We fear that something will have to happen before people realise the problems that we face.

Mr. John Cryer: I am not surprised to see the Tory Benches almost empty, given the Conservative Government's record on the London fire service. Since 1986, three stations have closed, with the loss of 63 pumps and 1,200 jobs. During the same period, the number of calls has risen from 144,000 calls in 1986


to 188,018 in 1996—a massive increase. But the key figure is that, last year, household fire deaths rose from 67 to 89, an increase of about a third.
The chief fire officer, Brian Robinson, in his report, to which reference has already been made, makes it clear that he does not want any cuts. In section 4, he states that it would be
preferable to make no reductions in the number of stations and pumping appliances until they can be considered in the context of the developing approach to protecting the community from fire and its effects.
One of the developments to which the chief fire officer refers is the Home Office review of fire safety cover, which is currently in progress, and will, I hope, lead to some pilot schemes in the near future with a shift towards a risk-based assessment.
My local station of Hornchurch has had two fire engines since 1936, since when there has been a huge expansion in roads—the M25, the Al27, the A13 and the Al2, all big roads—which see a lot of accidents, resulting in many calls on Hornchurch station and those around it. There has been an enormous increase in the number of people living in Havering, Hornchurch, Romford and Upminster and an enormous expansion in the number of office blocks, particularly in Hornchurch and Romford.
In 1997, the number of two-pump calls made to Hornchurch station—this is the key test, because we are talking about cutting 1.5 per cent. of the force there—was 396, compared with last year's figure, which was about 430, a significant increase. Hornchurch will, therefore, be in real difficulty if the second pump disappears this year.
The total number of calls made to Hornchurch last year was 1,410. That is a great deal more than the official figure, because it includes 450-odd calls from neighbouring grounds. We are therefore talking about a busy station with a high number of two-pump calls.
That brings me to the Fire Services Act 1947, which does not recognise, for example, road traffic accidents, which are a major cause of calls on a station such as Hornchurch. That legislation was framed when there were many fewer cars—nly a few hundred thousand—on the road, compared with 22 million today, most of which seem to whiz through Havering at one time or another. That has led to an enormous increase in the calls on Hornchurch station, and on Dagenham and Wennington and the Essex brigade, which has not been met by legislation.
During the past two years, I have discussed the problem many times with my hon. Friend the Under-Secretary and I know that he is genuinely concerned about it. The fact that the duties of the fire service have changed enormously during the past 50 years should be recognised in legislation.
My main point today is to ask the Government to call a moratorium on the proposed cuts to the fire service—the five pumps that are under threat. The Home Office fire cover review currently in progress will, it is hoped, result in a risk-based assessment.

Ms Linda Perham: I pay tribute to my hon. Friend for his campaign in Hornchurch. Does he agree with other hon. Members that the main problem is the pensions issue, and that, unless that is addressed, the LFCDA, and its successor, the Greater London authority, will continue to face problems, such as that at my station

at Hainault, which is faced with day crewing? Does he agree that there is much public support in London against the cuts?

Mr. Cryer: I certainly agree that there is enormous public support for the fire service, and the pension issue is a key problem. It takes up £70-odd million from a budget of about £300 million. Public support for the fire service in my area has been superb. The firefighters have mounted a magnificent campaign. Only last week, on one day alone, I, along with a number of firefighters from Hornchurch, handed in about 11,500 completed public consultation leaflets to the LFCDA offices at Albert embankment, just across the Thames. We also have a petition with 40,000-odd names on it, and I alone have had more than 1,000 letters, so the public support is there. Self-evidently, people clearly do not want to see cuts in the fire service.
Because of the particular factors affecting the London fire service, I should like the Government to call a moratorium on fire service cuts for the foreseeable future until we have a comprehensive review of the fire service. The chief fire officer makes it clear in his report that he does not want to make the cuts, and we await the Home Office review of fire cover. We also await the new authority and the mayor. The LFCDA has £5 million in reserve in a £6.5 million underspend this financial year, and next financial year it may well have another underspend. Until we have the Home Office report and the mayor and the new authority in situ, directly accountable to the people of London, I should like there to be a moratorium on fire service cuts.

Mr. Keith Darvill: I, too, congratulate the hon. Member for Twickenham (Dr. Cable), and I associate myself with the remarks already made by my hon. Friends the Members for Poplar and Canning Town (Mr. Fitzpatrick) and for Hornchurch (Mr. Cryer).
My constituency is served by Hornchurch fire station. I have studied in some detail the review of fire cover in London and have recently visited the Hornchurch station and the Romford station, which in part covers my constituency, where I have had extensive talks with the firefighters and local management. I have also visited the command headquarters on Albert embankment and had talks with senior officers there.
Since the publication of the review and the chief fire officer's recommendations, I have received many representations from constituents who are concerned not only about the Hornchurch station, but the other appliances at Addington, Hillingdon, Finchley and Heston. I am opposed to the recommendations and, although my constituents are concerned chiefly with Hornchurch, they associate themselves by implication with the other fire stations.
Of course I appreciate that the reductions in cover are driven primarily by financial factors. During my research, I became all too aware of the problems arising from the funding of the firefighters' pensions and the difficulties that this has imposed on the LFCDA. I shall deal with the financial aspects in a moment.
My primary reasons for opposing the reduction in the number of fire appliances are strategic cover, the ability to save life, risk-based assessment and various local


issues. On the subject of strategic fire cover, the review naturally refers to Home Office minimum standards. However, section 4.8 of the review reminds us that they are minimum standards, and no more than that. The standards to which we should aspire in the provision of public services—particularly emergency cover—should not be the minimum.
Section 4.10 of the review highlights the fact that each local station does not provide fire cover for a particular location. My concern is for the level of strategic cover: if we cut five fire appliances, I fear that in the event of a major incident such as the King's Cross disaster or the bomb on the Isle of Dogs, the London brigade will not be able to respond adequately and maintain reasonable cover for the rest of the metropolitan area. Although in the fullness of time the terrorist threat in London may abate, it is too early to be confident of that.
Furthermore, I believe that road congestion in London is almost certain to have an adverse effect on attendance times. Projected vehicle ownership statistics and average car journey times in London are surely relevant factors. London roads have been close to gridlock several times. Such occasions will inevitably increase, with adverse effects on emergency services. Sections 4.21 to 4.24 of the review state that in eight areas
difficulties are being experienced in meeting recommended response times.
The loss of five more appliances in London could, indirectly, cause the recommended response times in the areas in question to deteriorate even further.
Section 4.32 states that, in the chief fire officer's professional judgment, the minimum number of appliances that need to be kept ready to attend fires will be greater than the theoretical minimum needed to provide cover strictly in line with the Home Office's minimum recommended standards.
I concur with the point made in the review that there are strong arguments for keeping fire stations open and for the number of appliances not to be cut at stations covering areas of local deprivation. The key point is whether the right balance of strategic cover will be provided to maintain sufficient cover to ensure that the brigade remains able to respond effectively to major incidents and can deploy resources quickly if and when required.

Mrs. Eileen Gordon: Will my hon. Friend join me in praising all the firefighters and members of the public who are fighting the cuts? Does he agree that perhaps the best plan of action would, as my hon. Friend the Member for Hornchurch (Mr. Cryer) said, be to impose a moratorium on the cuts until the Greater London authority and mayor are in place? After all, it is they who will decide the future of the fire service in London, and to hand over to them stations that have lost pumps which cannot be replaced would give them a bad start when they come to form an overall picture of fire services in London.

Mr. Darvill: I agree with my hon. Friend, and I am aware of her work in that campaign.
I am seriously concerned that a reduction in the number of appliances in London will mean that the LFCDA will not be able to maintain strategic cover to the acceptable standard required by my constituents.
The ability to save lives is a very serious matter. It is clear that the emergency services now have the ability to save more lives than ever before. One of the reasons for the continued advances in their lifesaving ability is the improvement in paramedic support in ambulances and the involvement of specialist teams of doctors who attend serious incidents, especially road traffic accidents—RTAs.
I am advised that the attendance of firefighters and appliances at serious RTAs and in other situations where accident victims are trapped is often essential to ensure that those victims are released quickly from their entrapment, thus enabling doctors and paramedics to stabilise their condition and ensure that they are transported speedily to intensive care facilities.
Although many RTAs happen on highways other than motorways, it should be noted that the appliances to be removed are situated in outer London stations closest to the M25. If the number of fire appliances throughout London is reduced by five, the ability to respond to such situations will be diminished, so the recommendation should not be implemented.
Another primary reason for opposing the recommendations is risk-based assessment. I note that in section 3.13 of the review, the authority has recommended that the Home Office risk categories place undue emphasis on the value of property, as opposed to prevention of injury and loss of life. The current risk categories do not appear adequately to reflect the complexity of risk in densely populated urban areas.
Section 5 of the review deals with issues likely to impact on the provision of fire cover in future. I note that a range of matters is currently under active consideration, which is likely to result, possibly within two years, in a new risk-based approach to protecting the community from the effects of fire. In light of all the points set out in section 5, the main thrust of which I agree with, I believe that the recommendations to reduce the number of fire appliances in London should at least be postponed until after the matters under active consideration have been determined.

Mr. Simon Hughes: Fifteen years' of constituency experience leads me to share the hon. Gentleman's concern about the move—perceived and often real—from people—based, densely populated area risk assessment to property—based assessment. Does the hon. Gentleman agree that there should be public consultation by the LFCDA—using all its evidence and expertise—on how to assess risk, and that only after the results of that consultation have been subject to scrutiny by bodies such as Parliament should the matter go back to Ministers and the fire authorities so that they can decide on the number of machines and personnel needed to respond to the perceived risk for a given area? That could apply not only in London but elsewhere. Unless we get the assessment of risk right, we shall never be able properly to project what is needed by way of appliances and personnel for 24-hour cover.

Mr. Darvill: I do not disagree with that. I understand that the Home Office is examining those issues at the moment.
Any decision implemented now may need to be reversed in a relatively short time, and there could be adverse financial implications if fire appliances are removed and subsequently returned.
I acknowledge that ground calls, particularly at the Hornchurch station, have declined over the years—there are now 960 a year. Appendix C1 of the review sets out the possible impact on surrounding stations. I have queried that estimated impact, and have written to the chief fire officer, setting out my reasons for doing so.
It seems to me that insufficient weight is being given to off-ground calls and road traffic accidents. In fact, it appears that little or no account is being taken of RTAs. Greater significance should be attached to the service that the fire brigade renders at the scene of such accidents. In 1996 in the Hornchurch area alone, there were four fatalities, and 51 people were injured. In 1997, there were fortunately no fatalities but 31 people were injured; and up to mid-December last year, there were three fatalities and 31 people injured. Those are the figures for road incidents to which the fire brigade was called, not for road accidents in general. Also, 66 drivers and passengers needed releasing from cars involved in accidents. As I said, these statistics relate to the Hornchurch ground alone, but firefighters in Romford inform me that their experiences are similar.
I do not envisage any short, medium or long-term reduction in the number of RTAs that the fire service will be required to attend. As my hon. Friend the Member for Hornchurch said, Hornchurch is close to the A13, Al27, the A 1 2 and the M25. However, it is not only on motorways and trunk roads that serious RTAs occur. In fact, it appears that they occur on the network of rural and semi-rural roads, mainly in the D fire risk category areas. These accidents occur when the M25, the Al27 and the Al2 are congested and motorists exit the main roads to use country lanes with which they are unfamiliar. These roads are narrow, unlit and much more hazardous. Drivers are unfamiliar with the conditions and, as a consequence, RTAs occur. The fire brigade is frequently called out in those circumstances. London is densely populated and built up, but the outer areas of London are linked with the countryside, and that is where the accidents that I have described take place. The reasons that have been set out so far are surely sufficient for opposing the proposed reductions.
The situation with the firefighters' pay formula and pension and the reduction in reserves are the main reason why we are in the present position. We should regard firefighters' pensions and pay as contractual obligations of the public. It is no good complaining about pensions or the level of the award. We have entered into employment contracts with those public servants and we must fund them properly.
I am aware that there are many difficulties, and I am sure that my hon. Friend the Minister will refer to some of them in his reply. It is clear that public finances remain tight. Despite that, additional funds have already been directed to the fire service. Council tax precepts will not be able to meet the shortfall. Reserves have been depleted, but our constituents do not want to see reductions in fire cover, especially when they are being asked by the borough councils to pay increased council taxes that will be above the rate of inflation.
I hope that the Minister will be able to allay my fears about the future of the fire service in London. If we do not solve the problems that we have been discussing this morning, it is as sure as anything is in politics that the LFCDA will be back next year and the year after with more reductions. Eventually, the chief fire officer will not

be able to recommend further reductions. The percentage of the LFCDA's budget that is devoted to pensions and wages will continue to increase. What will happen then? The Government should grasp the nettle now and demonstrate what they can do to solve another problem which they inherited partly from the Conservative Government. I look forward to my hon. Friend's reply.

Mr. John McDonnell: The genesis of the problem has been thoroughly and more than adequately explained by my hon. Friend the Member for Poplar and Canning Town (Mr. Fitzpatrick) and by the hon. Member for Twickenham (Dr. Cable). I congratulate the hon. Gentleman on securing the debate. It is important that we recognise that the problem was identified a long time ago. I say that as the ex-chair of finance of the Greater London council. However, whenever the problem was identified, even in those dark mists of time, there was a lack of co-operation from central Government, and subsequently from individual boroughs, in addressing the problem.
I commend the stewardship of the London fire and civil defence authority after the GLC. I say as an aside that there were no pension holidays when the GLC was involved. The problem with the GLC's budget was that, in terms of revenue and capital, it was virtually capped by this House. In particular, I commend the stewardship of Councillor Tony Ritchie of the LFCDA after the abolition of the GLC. I have been present at meeting after meeting during which he has explained to borough leaders and Ministers—this happened year in, year out—that the problem was becoming worse year by year. I have listened to cant and hypocrisy from individual borough leaders. They went out on the streets campaigning against firefighting cuts while refusing to support an increase in the precept. Ministers argued against any further increase in support for the LFCDA to tackle funding problems while always promising reviews. That happened year after year without anyone tackling the problem. I do not blame the LFCDA for what has happened.
I heard what my hon. Friend and comrade the Member for Finchley and Golders Green (Dr. Vis) said about management. I do not want to take up his comments. However, I know that at every consultation meeting at which I have been present, with the hon. Member for Uxbridge (Mr. Randall), management have made clear their attitude on finance. We are talking about a financial problem and not about service delivery. The best is being made, with limited resources, of a very bad job.
There have been various wage increases over the years. I and others have been campaigning since the days when I was with Terry Parry, the general secretary of the Fire Brigades Union—God rest his soul—during the first major dispute. In those days, we had a hard time even securing a decent standard of living for firefighters; some of them were on poverty wages while providing a good service.
Time after time, Governments have commended firefighters for the wonderful role that they play and then refused properly to remunerate them. That is complete hypocrisy. I commend the FBU on all its negotiations with the GLC as I commend the LFCDA subsequently. They showed a flexible approach in tackling problems jointly with management. They examined the budgets and


put forward options that involved changing working practices, sometimes to the detriment of their members, in an attempt to save jobs.
The stewardship of the LFCDA under Councillor Ritchie and his colleagues has been superb in highlighting problems and trying to tackle them without co-operation from central Government and, on most occasions, the boroughs. The firefighters and others have commended the authority on the job that it has done with such limited resources during this period.
I shall refer to the implications for my patch. The hon. Member for Uxbridge briefly examined what has happened in Hillingdon. In the middle of my constituency is Heathrow. The proposals that we are discussing will remove a pump from Hayes, Hillingdon and Heston. These areas surround the airport, which is one of the biggest potential disaster areas in the country. Air disasters do not usually happen at the airport itself. We last had an air disaster in 1956, when an aeroplane dropped out of the sky at Staines before it could reach the airport. That is the risk area. I am concerned that we are not taking into account the real problems that the LFCDA will face in future.

Mr. Clive Efford: I intervene as someone who lost a fire station in my constituency last year. Local people are concerned about the enormous amount of development that is taking place around Woolwich and the millennium dome. That development will increase the amount of fire cover that is required to be provided by local fire stations, which will reduce their ability to serve the local community.
Does my hon. Friend agree that perhaps there is an opportunity for additional resources to be raised under the Greater London Authority Bill, with fire cover advice being provided through the LFCDA, where there is a great deal of expertise? I have in mind Canary wharf and what the LFCDA received for the advice that it gave in that instance. Perhaps we should examine that approach urgently.

Mr. McDonnell: My hon. Friend makes a valid point which I shall move on to in a moment.
The thrust of our argument is that for the sake of us all we should stand back for a period and then tackle the problem once and for all, rather than having another round of cuts and decisions put off for another year—followed by another round of cuts next year and the year after. If the Government are about anything, they are about saying, "Let us tackle these problems objectively and seriously to secure a long-term future."
The situation is sometimes almost Pythonesque. My hon. Friend the Member for Eltham (Mr. Efford) may think that he has problems, but in my constituency I have the airport, the M25, the M4, the M40 and the A312. The hon. Member for Uxbridge and I share, as it were, Northolt. There are many bizarre proposals for the development of Northolt. In addition to that, I am in the middle of a single regeneration budget area. The massive development that has been proposed is not yet even at the planning stage, but it will go ahead because the money has already been allocated. We have the risk of terminal 5 and even a third runway. At the same time we are

cutting the very basis for tackling any firefighting problems that might arise as a result of the developments to which I have referred.
I was at Camden town hall as a local government officer on the night of the King's Cross disaster. I and others were present at a social services committee when the news came of the fire. Our job was to prepare the mortuaries for the dead. I remember all the lessons that we were supposed to learn from King's Cross about investment, resources and training in the long term. No more were we to have short-term measures or cuts. Even then, we were talking about risk assessment. However, the present risk assessments are archaic. They take no account of road traffic accidents.
I agree with my hon. Friend the Member for Upminster (Mr. Darvill) about the problem of rat running. Cars coming off the M4 and M40 rat-run through my constituency, as they do through Uxbridge. Deaths occur when this happens. Firefighters are called to attend these accidents. My constituency can be at risk because the gridlock in the area is such that we cannot get transport into it.
I appeal to my hon. Friend the Minister to agree that we should act on all fronts and on all sides. I agree with the proposal for a moratorium. There are three reasons why we want a breathing space in tackling the problem. First, the GLA is coming. That will give us an opportunity over the coming weeks to put new powers in place that will enable us to tackle the problems. We are in a position to give new powers to the new authority, if necessary, to increase charges, and to consider new forms of revenue funding that will stand us in good stead in the long term. Secondly, the review of risk assessments is forthcoming. Why jump the gun before that report is made? Thirdly, we must examine the pensions fund report from central Government that we have been promised. That will tackle the problem once and for all.
I urge the Government to proceed with a moratorium. If that means a larger precept increase than would normally be allowed for one year, let us do it, or if it means a combination of a special grant and an additional increase in the precept, let us do that, but let us not put our constituents' lives at risk for yet another short-term fix.

Mr. John Greenway: I congratulate the hon. Member for Twickenham (Dr. Cable) on his success in the ballot for this debate. It is a timely opportunity for the House to discuss these matters before the meeting of the London fire and civil defence authority on 18 February. My only criticism of the hon. Gentleman is that all the solutions on which he concentrated would require more expenditure and he made no reference to the alternatives, as I shall, and as, I am sure, the Minister will.
Before I address the key issue, mostly in the form of questions to the Minister, I pay tribute to the courage and bravery of firefighters not only in London but throughout Britain. They are always there when we need them and they serve us well.
The key issue that the House and, on 18 February, the London fire and civil defence authority must address is the need to set a budget for the coming year. That will require difficult choices to be made. It may be that the only way in which a budget can be set and council tax precepts kept within Government guidelines will be to


implement the proposal to withdraw five pumps—about which there has been much discussion this morning—unless the Government relax the capping limit.
The first issue that I want the Minister to address relates to the LFCDA leaflet on the consultation document. One of the four options that was canvassed was that there would be no cuts at all and, as a result, there would be a 20 per cent. increase in council tax. The sums of money involved are not enormous, but the precept would go up by 20 per cent. The House needs to know what will happen if the consultation result demonstrates that a majority are in favour of paying more than the Government guideline. It is all very well to have consultation, but sometimes the answer may not be palatable to Ministers.
If the Government insist that the precept guideline must be adhered to, responsible councillors from all parties will have no option but to support the chief fire officer—

Mr. Efford: Will the hon. Gentleman give way?

Mr. Greenway: I have very little time in which to make my comments, and I did not intervene on any other hon. Member who spoke.
Responsible councillors will have no option but to accept the chief fire officer's recommendations, provided—this is the big caveat to which hon. Members have referred throughout the debate—that they are satisfied that fire safety standards are not compromised.
I sat through the debate with a sense of deja vu because there were similar debates when I sat on the Benches where the hon. Members for Poplar and Canning Town (Mr. Fitzpatrick) and for Upminster (Mr. Darvill) now sit. In my constituency, a two-pump station had one of its pumps removed, and there were petitions and expressions of local concern and anxiety.
I make two points about that to the House. First, the passage of time has revealed that the fire officer's assessment was correct. More important—this is the nub of the problem with the proposals—the cover provided is greater than the Home Office minimum standard, and that is the thrust of what is happening now. There is a limit to how far the policy can go. As long as a gap remains between what is provided in a given area and the Home Office minimum level of provision, there will continue to be opportunities to make such cuts.
I said that I would discuss alternatives to simply spending more money. The chief fire officer acknowledges that there is scope for greater efficiency and that great strides have been made on that in recent years. In the briefing that he sent to hon. Members, he seems to take pride in the fact that during the past seven years, £20 million per annum has been removed from the budget by efficiency savings, and that, of more than 800 staff reductions during that time, only 8 per cent. involved uniformed staff. That is a creditable performance, and the House needs to give credit where it is due.
Conservative Members agree that there are new ways of providing services. I listened to what the hon. Member for Finchley and Golders Green (Dr. Vis) said about liaison, but it must make sense to pursue greater liaison with other emergency services, and that is happening not only in London but in other parts of the country.
More can be done to prevent fires, and the private and commercial sector, in particular, has already done that. We need to redeploy resources to modernise delivery of

the service. We need to find new ways to increase income and attract sponsorship. There may be scope for amending the Greater London Authority Bill—I am delighted to see here my hon. Friend the Member for Croydon, South (Mr. Ottaway), who is piloting the Bill through Committee for the Opposition—to provide the new authority with legal powers in its fire responsibilities. Will the Minister consider whether he agrees with that assessment?
My fundamental question for the Minister is whether the Home Secretary would accept the advice of the chief fire officer and approve the five pump withdrawals, if that decision is made. Does he agree with that? Has he been advised that the fire standard could be met if the five pumps were withdrawn? What advice has the chief inspector of fire services given on meeting the minimum standard? Has that advice taken account of the increased demand for the fire services to provide emergency cover to road traffic accidents on the M25, which runs through many of the areas that will be affected by the proposed pump withdrawals?
Has the Home Office done any research on the resource implications of the proposed shift from risk-to-property assessment to risk-to-life assessment, and with what result? What impact will that have on the fire cover standard, which underlies the proposals made by the chief fire officer for London?
I also want to ask the Minister about resources and efficiency savings. I am surprised that not one of the speakers in the debate referred to the fact that the Government have imposed a 2 per cent. efficiency saving per year for three years, which has of course exacerbated the shortfall of income against revenue currently experienced by the London fire service. Did Ministers know that there had been a 5.6 per cent. pay increase for the fire service when they were setting that 2 per cent. efficiency saving? Did they know that pension costs already accounted for over 20 per cent. of revenue and were getting worse? I agree with much of what has been said about the need to deal with pensions. I hope that we shall have the opportunity to debate that on another occasion.
Does the Minister agree that it would be sensible to use up to £4.5 million of the London fire service's reserves? Does he accept, however, that that could not be repeated? Does he agree with those who express concern about the need for the new Greater London authority to have some reserves? How will Ministers measure whether the 2 per cent. efficiency increase has been delivered and not merely reflected in cuts and use of reserves? How does the Minister anticipate that the 2 per cent. efficiency savings will be delivered in years two and three?
I do not want to cross swords with the hon. Member for Poplar and Canning Town, but I am concerned that some of the comment in the Fire Brigades Union's latest magazine on the scale of potential cuts as a result of the second and third years of efficiency savings was rather alarmist. Perhaps we can address that.
We think that the Government are right to continue the previous Government's policy of making the fire service more efficient, as well as more effective, to obtain better value for taxpayers. The Government will need to be flexible, to support fire officers, members of the fire service and hon. Members who have concerns, and review whether the 2 per cent. year-on-year efficiency saving is


deliverable without compromising public safety. Above all, this debate has shown that the public need to be reassured that any changes will lead to a better fire service and a safer capital city.

The Parliamentary Under-Secretary of State for the Home Department (Mr. George Howarth): I join everybody else in congratulating the hon. Member for Twickenham (Dr. Cable) on securing his second debate on the fire service in London, which has provided us with a useful opportunity. I understand the importance that all hon. Members who have taken part in the debate attach, on behalf of their constituents, to the quality of the fire service in our capital city. As the hon. Member for Uxbridge (Mr. Randall) and several of my hon. Friends have conceded, we have every reason to be proud of our fire service. It is a great privilege for me to work with a service that is highly regarded by the public, and which achieves consistently high standards of performance—often, as many hon. Members have said, in very difficult and hazardous circumstances.
In the time available, I doubt whether I shall be able to cover all the points that have been raised. I undertake to reflect on Hansard and to write to hon. Members in more detail and at greater length on any points that I do not cover. My comments similarly apply to the hon. Member for Ryedale (Mr. Greenway).
Last week, the Audit Commission published its timely report on performance indicators for local authorities, which showed that, in 1997–98, the London fire brigade met the national standards for responding to fire calls on 91.5 per cent. of occasions. That is its best performance in the four years that the Audit Commission has been collecting such figures. The figure was slightly below the national average of 96 per cent., but, given the more problematic circumstances of a capital city, several of which have been described, it is a very creditable performance. My hon. Friend the Member for Finchley and Golders Green (Dr. Vis) made some very trenchant criticism of the London fire and civil defence authority, and the brigade and its leadership. He should take time to read the report. Perhaps then he would take a slightly different view.
I should like to say a word about pensions, which have been mentioned quite extensively. We of course recognise the implications of increasing pension expenditure for the overall settlement and for changes to the fire standard spending assessment distribution formula for 1999–2000. Although it has not been said in this debate, it has occasionally been reported as fact that it is not true that we take no account of pensions in the formula. The matter is given weight; we consider it important. We are considering responses to the pensions review in consultation with colleagues, and over coming months plan to publish our proposals for the future of the firefighters pension scheme.
We are keen to adopt a consultative approach; we shall be consulting all interested bodies as the proposals are developed. I say to hon. Members who have said that there has been very little action, even though the problem has been apparent for many years, that we are moving towards some solution. It may not be ideal or short term,

but we recognise the need to consult. Points and suggestions made in the debate will certainly be taken into account.
We published the findings of the review that the previous Government set up. I do not want to be too partisan, because nobody else has been, but it was notable that the previous Government ensured that it was not published before the general election. They left us to publish it. We did so, and are consulting on it. I wanted to make that point because it is important.
The fire authority for London, like all fire authorities in England and Wales, will of course be subject to the proposed duty of best value, which is set out in the Local Government Bill. That places an explicit duty on authorities to secure continuous improvement of the delivery of their services. The focus is on quality and efficiency. The driving force will be the use of performance indicators, standards and targets, and most important, the use of various ways of consulting the public. The importance of that has emerged in several ways.
The hon. Member for Ryedale raised the question of efficiency. There is continual scope, not just in London but elsewhere, for greater efficiency in the fire service. I welcome the fact that the leader of the London fire authority, Councillor Ritchie, is a member of the forum that is considering best value for the fire service. So there is scope for best value and greater efficiency in London.
I should point out, although it is slightly repetitive to do so, that, following the comprehensive spending review in July, we announced that authorities in England would receive an overall increase in the fire service element of the total standard spending of £143.6 million—an average increase of 3.5 per cent. That includes £47.1 million—or 3.6 per cent.—for 1999–2000. Details of the settlement were published on Monday, and will be debated in due course. I am particularly proud that London has done very well over the past two years, as the hon. Member for Twickenham acknowledged.
I should say a brief word about applications concerning fire cover arrangements—several have been referred to—that the London fire authority may decide to make that would affect the constituents of several hon. Members present. My right hon. Friend the Home Secretary will grant approval for such applications only if he is satisfied that the proposals have been widely publicised; that representations have been considered by the fire authority and, most important, that Her Majesty's fire service inspectorate advises that national standards for fire cover will be maintained. We take those responsibilities very seriously. Before we agree to any such proposal, we must be convinced that it does not represent a risk to the public.
This has been a good debate. Unfortunately, time has not allowed me to acknowledge and respond to every point. Although many items that arose under the previous Government still need to be discussed before the fire service is absolutely as we would want it to be, we aim to maintain the mood of co-operation in local government and other interests. Between us, we can start to move on and to modernise an already good fire service, to take us into the next century—

Mr. Deputy Speaker (Mr. Michael J. Martin): Order.

The Muslim World

Mr. George Galloway: Britain's relations with the Muslim world are unarguably at a difficult and testing juncture, and in this debate I want to probe the Government's mind on the difficulties and tests that face them in relation to the strategically placed, vast and growing world of Islam, with its more than 1,000 million adherents across many continents—including, of course, perhaps 2 million citizens of our own country.
Inasmuch as my speech, limited as it is to 15 minutes, will be something of a Cook's tour, I hope that my right hon. Friend the Foreign Secretary will at least heed the general direction of my concerns, some of which are well enough known to him, but not to others.
I want to start at home, with what I believe will be a major headache for the Government in the weeks to come—the trial of a large number of British nationals in Yemen. They are charged with forming an Islamic extremist terror group with intent on creating mayhem in that poor Arab country, which has already suffered much from the near decade-long crisis in the Gulf. Public opinion in the Arab world is simply dumbfounded at the allegation that, rather like selling coals to Newcastle or sand to Arabia, Great Britain may now be exporting such terrorism to Muslim countries.
I do not want to add to the difficulties of the Minister of State, my right hon. Friend the Member for Leeds, Central (Mr. Fatchett), but I must tell him that I do not like the look of Finsbury's Park's "ayatollah", Mr. Abu Hamza al-Masri—and I do not, of course, mean his hooks for hands or his glass eye. I do not suppose that I am alone in that opinion, but the difference is that I never liked the look of the rag-bag of obscurantists who constituted the so-called "holy warriors" of the Afghan jihad. But of course these elements, who have now razed Afghanistan to stone age ruins, and who have grievously affected the economic, social and political life of neighbouring Pakistan, were conceived, financed, armed, trained and politically supported, not only by the United States of America, but, it is clear only now, by previous British Administrations. So we and our allies played Dr. Frankenstein in the creation of some of the monsters that we now bemoan.
Of course the individuals on trial in Yemen must be tried fully in accordance with the law in that country. That criterion is an important distinction from the demands being made in some of the commentary on the case. Of course Yemen will be expected to conform to the international norms to which it has signed up, and to the norms of diplomatic practice; but terrorist suspects cannot expect to be dealt with differently in Yemen just because they are British. The irony will not escape the House that the alleged targets of the alleged terrorists included the British embassy, which is now being asked to mount a defence campaign.
I regret to say that our position is not helped by the fiasco that surrounded the release, after serving a fraction of their sentences, of the two British nurses convicted of the murder of their colleague, Yvonne Gilford, in Saudi Arabia. If my right hon. Friend the Prime Minister had asked my advice, I would have said that it was exceedingly unwise to intercede with King Fahd to try to secure the early release of those prisoners. The lucrative

festival of crude anti-Muslim, anti-Arab racism in which sections of our media wallowed over those two women was entirely predictable and deeply offensive and damaging in itself.
Of course, we shall now be under considerable pressure to make the same type of intervention in Yemen—and already, with their courtroom outbursts about torture and even sexual abuse, the Yemen Eight are clearly not unmindful of the highly successful script first written on behalf of the Saudi Two. If we do not intervene, there are no prizes for guessing what charge will then be levelled against us; or for predicting that the whole affair will give a further twist to the alienation of so many in the Muslim community in our midst which is caused by the perceived racism, Islamophobia, discrimination and perceived double standards in British policy towards Muslim countries.
In the past three years, surveys conducted by the Runnymede Trust and other important surveys have amply demonstrated that anti-Muslim racism is a virulent and increasing issue in this country. It is not the province of bovver-booted skinhead lumpen thugs only. Indeed, it has been said that Islamophobia is the last "acceptable" form of racism, suitable for even the dinner tables of Islington and Hampstead.
Although in this short debate I do not want to over-dwell on the issue that the Minister and I have often debated—the conflict in the Gulf—it clearly cannot be separated from any review of the problems of relationships with the Muslim world.
Till the day I die, I will never understand what possessed the British Government to participate in the bombardment of an Arab capital city during the holy month of Ramadan. With all the centuries of collected wisdom, not least the once almost unique understanding of the Arab world within the British Foreign Office, how could it be that the devastating effects on Britain's standing in the region were not foreseen?
Early last year, with other parliamentary colleagues, I inspected the splendid work being done by the British Council in Damascus. By the end of the year, the premises were ruined, torn apart by the rage of the Syrian people at the outrage of the Ramadan attack. In Morocco, in Jordan, in Egypt, in Palestine and in Algeria, our flag burned with the stars and stripes, and was trampled underfoot in demonstrations that numbered, not hundreds of thousands, but millions of angry citizens.
It is no good pretending to public opinion in this country that we have support in the Arab world for the Anglo-American policy. It is no good for Ministers to state in the United Arab Emirates—where I was just yesterday—that the Government's policy towards Iraq is the same as the UAE's policy, "with slight differences". Well, as President Clinton might say, it depends on what one means by "slight". The UAE is completely against the bombing of Iraq; we are doing the bombing. The UAE is in favour of lifting the sanctions urgently; we are the strongest supporter of that sanctions policy.

The Minister of State, Foreign and Commonwealth Office (Mr. Derek Fatchett): indicated dissent.

Mr. Galloway: The Minister shakes his head, but I discussed this matter with the leadership of the UAE at the weekend. For the benefit of the House, let me read


the first and second declarations of the final communiqué of the Arab Foreign Ministers' meeting in Cairo last month. The quote is not a footnote, but declaration 1 and 2, which state:
1. The Arab Ministers of Foreign Affairs express their deep objection to employing military force against Iraq which has resulted in many civilian casualties and demand that the use of diplomacy be the means of achieving compliance with UN resolutions …
2. They express their full support to the Iraqi people in their plight resulting from the sanctions imposed on it and stresses that every international effort must be made to lift these sanctions as soon as possible.
As my right hon. Friend may know, I have the benefit of watching Arabic television and closely following the Arabic media. I saw the interview with the Egyptian Foreign Minister, Amr Moussa, immediately following his meeting with my right hon. Friend, and he left the audience—I have the videotape—in no doubt of what he had told my right hon. Friend. The truth is—and my right hon. Friend knows it—that in the Muslim street, in the Arabic media, among the intelligentsia and in virtually every Arab capital, Britain's policy to bring about an end to the confrontation with Iraq is utterly rejected.
There is no use attempting to justify the unjustifiable by peddling outlandish propaganda hoaxes, as some have been doing in closed-door meetings of late. The Foreign Secretary twice told Labour audiences that a boy, now aged 16, had been in prison in Iraq since he was five years old, and that his crime had been to throw a stone at a portrait of the Iraqi president, Saddam Hussein. That is reminiscent of the product of a less sophisticated age, and harks back to the propaganda against "Kaiser Bill and the Hun" in the first world war.
I have asked the Foreign Secretary, and I ask the Foreign Office again now, publicly, to substantiate that story—to give me the name of the boy, the name of the prison and any other identifying details—and I will personally campaign for his immediate release. I hope that the Foreign Office will provide such substantiation, as it goes to the heart of the veracity of the Government's case.
I know, of course, that the Minister cannot say that he shares my views on many of these matters, but I shall advance some suggestions which, after due reflection, might appeal to my right hon. Friend rather more.
First, the Minister knows, and I know, and I know that he knows, that the bombing of the pharmaceuticals plant in Khartoum was a ghastly, terrible mistake. The plant was making not chemical weapons, but vitally needed medicines for one of the poorest countries in the world and one of our oldest Arab and Muslim friends. It was not a legitimate target for a massive hail of cruise missiles.
That is why the British Foreign Office has remained completely silent about the affair since the day that it happened. Indeed, many in the west have all but banished the memory of that crime from their mind, as though that will make it go away. It will not go away, and remains a cause of deep and abiding resentment in the Muslim world. The Government would do themselves a power of good if they could find a way clearly to dissociate themselves from the attack on Sudan.
Secondly, the Minister knows that I have had sharp political disagreements with the Government of Saudi Arabia and with their ambassador to the United Kingdom,

Dr. Ghazi Alghosebi. Nevertheless, I believe that the Government should support the candidature of Dr. Alghosebi for the general secretaryship of UNESCO.
The ambassador is the candidate of all the Arab League countries and will have widespread support throughout the Muslim world. He is an outstanding intellectual, writer and poet, and is personally highly qualified for the post. If Britain used its vote and its influence in the Commonwealth and elsewhere in support of his candidature, again we would be sending an important and welcome message to the Muslims of the world.
Thirdly, the Foreign Office should constitute a working party or an ad hoc committee of the kind frequently spawned in relation to our position in Europe. Such a body should consider ways in which we might improve our position—which stands much imperilled—in the Muslim world.
Recently, I was in Paris, where I visited the Institute du Monde Arabe on the Seine overlooking Notre Dame. For me, it was an Aladdin's cave full of the wonders of the great Arab civilisation, its cultural richness, its food and literature, its films and music. The institute was full of people on a cold, wet Sunday in December. I began to wonder why we do not have an institute of the Arab world in this country, or in our case, an institute of the Muslim world, reflecting our much wider historical relationships.
Such an institute could, like the French one, be part-funded by the Government, by friendly Muslim Governments, by British business and by individual benefactors. It could play an important role in enhancing the British people's understanding of and respect for the Islamic world, and help to combat the alienation felt by the 2 million Muslims in our country.
The institute could be a bridge, linking east and west in trade as much as in education, and in culture as much as in politics. I believe that school and university students, foreign visitors and interested citizens, not least those in the ethnic minority populations, would find it a bridge to greater understanding and the avoidance of prejudice.
We have a longer and deeper history in the east than any other country in the occident. Notwithstanding recent and current events, there is still widespread admiration and affection for the people of this country among the Muslims of the world, but it is trickling away, and no longer slowly. I hate to see the bonds of those centuries burning in enmity. I hope that the Minister will give further consideration to the arguments that 1 have advanced.

The Minister of State, Foreign and Commonwealth Office (Mr. Derek Fatchett): My hon. Friend the Member for Glasgow, Kelvin (Mr. Galloway) has raised a wide range of issues, to which I shall try to respond. He paints a vivid picture of the middle east. I was in the region last week, and I can tell my hon. Friend that I do not share that picture; nor was it a picture presented to me by those whom I had the opportunity to meet, both leaders and others. Clearly, we all travel differently and come to different conclusions. I do not share my hon. Friend's conclusion.
I share my hon. Friend's comments about the Saudi ambassador, who is an excellent representative of his country and, as my hon. Friend said, a well known poet and intellectual, who will be a strong candidate for the post of director of UNESCO.
My hon. Friend spoke of the attractions of establishing a Muslim institute in the United Kingdom. We are already blessed with one or two excellent bodies. Two weeks ago, I had the pleasure of visiting the Centre for Islamic Studies in Oxford, which has a worldwide reputation and attracts many Arab scholars. If we are not too myopic, we will recognise in the United Kingdom what is probably the world's leading institution for Islamic studies.
Yesterday, I had the pleasure—which may not yet have been brought to my hon. Friend's attention—of launching the exhibition, "Mutualities: Britain and Islam", which will run for the next six months as part of the visiting arts programme, and which brings Islamic art to the United Kingdom. My hon. Friend's suggestion has already been acted on. I can tell the House that he did not give me a copy of his speech in advance, and we therefore did not know that he would make the suggestion, but so influential is my hon. Friend at the Foreign Office that we launched the visiting arts Islamic programme a day before the debate.
I shall say a few words about Iraq, Yemen and our relations with United Kingdom Muslims and the Islamic world. On Iraq, there was a view, which I always held to be wrong, and which was expressed after Operation Desert Fox, that it would be impossible to create a new international consensus on Iraq, and that it would be impossible to deal with the disarmament issues because sanctions had to be lifted immediately.
Because of his travels, my hon. Friend may have failed to see the statement issued unanimously from the United Nations Security Council last Saturday, which dealt with all those issues. It shows that the Security Council is back in business, and that there is now a consensus covering the Arab representative on the Security Council, Russia, France, China, the United Kingdom and the United States. That consensus also extends to the Arab League statement. My hon. Friend should read the presidential statement, to which all 15 countries signed up.
There is a new consensus, and three panels have been established to deal with disarmament and monitoring, humanitarian issues, and outstanding issues relating to Kuwait. The best way that my hon. Friend could take forward the well-being of the people of Iraq would be to ask Saddam Hussein and those around Saddam Hussein in Baghdad to co-operate with the United Nations. That is what the Arab League Foreign Ministers are asking for. The United Nations—not just Britain, not just the United States, but France, China and Russia—are asking for such co-operation. It is a sine qua non of further progress. My hon. Friend would do the people of Iraq a great service if he sought that co-operation from the regime in Baghdad.

Mr. Galloway: Will my right hon. Friend give way?

Mr. Fatchett: No, my hon. Friend has had 15 minutes.
My hon. Friend would also be serving the purpose if he pointed out that the way to remove sanctions, which is now accepted by the Arab League and by the Security Council unanimously, is through Iraq's co-operation. The Arab League statement and the Security Council statement said that the body of law that relates to Iraq

is from the Security Council resolutions. There must be co-operation. There must be compliance. Sanctions cannot be lifted without that.

Mr. Galloway: On that—

Mr. Fatchett: No, no, I cannot give way in a short debate.
On disarmament, there were those who said that the disarmament phase was finished in Iraq, and that there would be no further role for UNSCOM or for the International Atomic Energy Agency. Again, I suggest that hon. Members read the presidential statement. There is to be a role in the panel for UNSCOM and for the International Atomic Energy Agency.
I congratulate Jeremy Greenstock and his colleagues in the United Nations, and I pay tribute to all the work that has been done by the Foreign Office. That work has enabled us to build a new consensus, with which we are comfortable and which takes forward the issues of Iraq. We must put the onus on Baghdad: if Baghdad co-operates, there will be light at the end of the tunnel. Baghdad must listen not just to the Security Council but to its neighbours who are saying that co-operation is essential.
My hon. Friend criticised my right hon. Friend the Foreign Secretary. It is interesting to note that, in all his comments about Iraq, my hon. Friend did not refer to the missing Kuwaiti prisoners of war. He did not refer to Iraq's systematic human rights violations or to the Kurds who were killed, injured and maimed by exposure to chemical weapons. He did not mention how the Shia people of southern Iraq were the victims of torture and suffered death and injury at the hands of Saddam Hussein.
I shall relate for my hon. Friend a stark personal experience that I had last year. I regularly meet displaced Iraqis and, 12 months ago, I met at the Foreign Office a young Kurd who was the victim of chemical weapons. He told me privately that his health was so bad that he probably had only a short time to live. That was because, during his teenage years, he had been exposed to chemical weapons. That young man may not be alive today. When talking about Iraq, I hope that my hon. Friend will not forget that young man and the many tens of thousands of young men just like him.
There is a strong moral argument for acting, as we and the international community have sought to do over the years, to disarm Iraq and make it less of a threat to regional security and to its own people. I am confident that we have taken the right decisions and the moral ones. The best possible course of action for us all—whatever we might think about the short-term tactical issues—is to ensure that Iraq is given the green light to co-operate because, without co-operation, there can be no progress.
My hon. Friend mentioned Yemen and, characteristically, seems to have reached his own conclusions although the legal process has hardly begun. That is not—and cannot be—the position of the British Foreign Office. We will always—in Yemen or in any other circumstances—treat equally all those with British citizenship. We have a consular responsibility, which we will carry out. If my hon. Friend puts down a written parliamentary question on the subject, I shall set out the chronology of events in relation to the five men in Yemen and the action that the Foreign Office has taken. We have


sought to meet our responsibilities to those five individuals: we have tried to ensure that they have a fair trial and access to lawyers and consular staff. That is the action that we would normally take in similar circumstances.
While I serve as a Foreign Office Minister, I shall ensure that the consular service of the British Foreign Office works equally for every British citizen, regardless of colour, religion or background. That is what has occurred in this case, and I give a clear commitment that it will continue. We will not make judgments about people's guilt: people deserve a fair trial. We will not make judgments about any British citizens who are involved in a legal process. That is not our task; neither is it our task to represent British citizens in court. However, we must ensure that each and every British citizen has the same rights.
I take very seriously the issues to which my hon. Friend referred. I am the first Foreign Office Minister to initiate regular meetings with representatives of the United Kingdom Muslim community. I met them yesterday and heard a wide range of Muslim opinion. We meet once every two or three months, and the meetings are developing in an interesting direction. I am delighted that we can meet and that I can hear about the foreign affairs interests of the Muslim community. Yesterday we talked about Kosovo—in which the Muslim community has a real and genuine interest—Yemen and a little about Iraq. However, Kosovo and Yemen were the main issues of discussion during our two-hour meeting.
I seek openness and something more than that: I want the British Foreign Office to reflect Britain; recruitment to the Foreign Office must reflect a modern Britain. Members of the Muslim faith must have every opportunity of being recruited to the Foreign Office and of progressing their careers within that Department. I look forward to the day when someone of the Muslim faith emerges, on merit, from the staff of the Foreign Office who is capable of representing Britain as an ambassador overseas. We have opened the door to the Muslim community, and we look forward to those changes.
It is known widely in the middle east that I am determined to avoid giving any credence to the argument that there will be an inevitable clash of civilisations: a

challenge between Christianity and Islam. I have always regarded that as dangerous and incredibly sloppy thinking, which fails to recognise the great divisions within Christianity and Islam. It is immensely dangerous to believe that Christianity versus Islam must replace the great cold war crusade of capitalism versus communism. We must avoid that trap. That is why, in my discussions in the middle east, I have told leaders that we must open a dialogue about Christian and Islamic values that recognises the interaction between civilisations and is sensitive to each set of beliefs and values.
We can do much more in that regard. That is one of the reasons why, during our European Union presidency, we called for regular meetings between the EU and the Organisation of the Islamic Conference. Such meetings might be governed by a very formal agenda, but it is one way of bringing together people of different faiths from different backgrounds who may have different agendas. We are keen to advance that process. However, I give a clear commitment to my hon. Friend that, when it comes to the standing and the status of Islam in the world, I shall always be on the side of those who seek to ensure that those beliefs are granted true legitimacy. We simply do not subscribe to the notion that Islam is a force for evil.
Furthermore, I wholly object to the labelling and stereotyping with regard to Islam that is often the product of lazy journalism. The British media often refer to "Muslim terrorists" but do not apply the same sort of labels to terrorists from other faiths. That sort of labelling must be stopped. We need to look at people in the round, taking account of their values and faiths.
I am delighted that my hon. Friend has provided this positive opportunity to talk about the activities of the Foreign Office and the way in which it is working with the Muslim world. My hon. Friend did not mention one possible forthcoming event of significance to the Muslim world. I hope that this year Indonesia will become a democracy comprising 200 million people, mostly of the Muslim faith. That will be a tremendous change and advance in the world.
My hon. Friend always paints a vivid picture—his school of art and his school of rhetoric are very close. Although I often admire his brushwork, I think that his concern with detail is not as good as his broader strokes. I do not recognise the picture that he painted of Britain's relations with the Arab world.

Elderly (West Sussex)

Mr. Tim Loughton: In West Sussex we know something about the elderly, and we certainly value them. In 1996, 171,000 people out of a total county population of 727,000 were over pensionable age. That is 23.6 per cent.—almost a quarter—against 18.2 per cent. for the country as a whole. It is forecast that by 2016—twenty years on—that gap will have widened and more than 27 per cent. of the population of West Sussex will be of pensionable age against the national average of 21 per cent.
The constituencies on the coastal strip, which are represented by my hon. Friends who are in the Chamber today, all feature in the top 27 constituencies with the highest number of pensionable age residents. Top is Worthing, West with 42.6 per cent.; ninth is Bognor Regis and Littlehampton with 36.8 per cent.; Chichester is 17th with 33.2 per cent.; and my constituency of Worthing, East and Shoreham is 27th with 32 per cent.—almost a third—of residents of pensionable age.
Worthing borough has the highest number of pensioners in the entire country, but it is forecast that we will be overtaken by Clacton-on-Sea in 2000. Although the average age of people in Worthing is decreasing, we have twice the number of over-65s, and three times the number of over-85s, compared with the national average. Nationally, the number of over-85s is forecast to double to 2.2 million by 2040. That will impact on us most of all.
There is net immigration into West Sussex, which we welcome; it is a nice place to live, and also to die. Part of the character of Sussex is represented by its elderly population. None of us in the Chamber would want it any other way, but, contrary to popular myth, not everyone in Sussex—and on the coastal strip, in particular—lives in a castle. There are many areas of deprivation.
Under the index of local deprivation drawn up for judging single regeneration budget challenge fund criteria, Central ward in Worthing, for example, was ranked among the 10 per cent. of wards in England that are most deprived. Areas of Adur, in my constituency, suffer high unemployment, which leads to poorer pensioners living in rented accommodation. The same is true in parts of Littlehampton, in the constituency of my hon. Friend the Member for Bognor Regis and Littlehampton (Mr. Gibb).
The high preponderance of elderly people in our county means that very great demands are placed on the health budget and on social services spending, which is what I want to discuss today. The national health service survey produced by The Times last November revealed that West Sussex has the longest delays for hospital treatment in the whole of England: one patient in seven on the waiting list—14.9 per cent. of that list—waits for more than a year for hospital treatment. Lambeth is next, with 12.7 per cent.
At the opposite end of the scale, northern authorities such as Sunderland and Northumberland have less than 0.5 per cent. of patients on waiting lists waiting for over a year. There are 30 times more patients waiting over a year on West Sussex waiting lists than on those of the best performing hospitals in England.
Only West Sussex last year recorded a bigger rise in the number of patients waiting for over a year. The figure increased from 902 to 3,634, which is a very large

increase. Typically some of the longest lists are for age-related operations, such as hip replacements and cataract operations. Problems are widespread, extending particularly to mental health. There is a dire shortage of acute mental health beds.
It is no surprise that the largest branch of the Alzheimer's Disease Society is in Worthing. The priority care trust responsible for those services has overspent by £550,000, with two months of the financial year to go, despite having made savings of £450,000 already. For the first time ever, it will not be able to balance its books. Worthing also has the largest branch of the Parkinson's Disease Society, and I pay tribute to the work that it has done.
West Sussex health authority overall is £5.5 million over budget, despite the best efforts of all its staff. We are desperately trying to reduce the waiting lists, but Worthing and Southlands Hospitals NHS trust, for example, has 90 nurse vacancies and a severe problem with nurse recruitment. A high level of emergency admissions compounds that problem.
We need special help for special age-related problems, but, despite the extra money last year, our funding remains under capitation. The health authority is the worst funded in the whole of the South Thames region, after the accumulation of years of being funded well below capitation. Now we are threatened with unbearable pressure to reduce waiting lists by the end of March. For example, if Worthing and Southlands Hospitals NHS trust does not reduce its waiting list from 7,500 to a target of 5,000, it will be penalised to the tune of £450 for each patient over that target figure at the end of March. The largest reduction target for any hospital in the country has been given to Worthing and Southlands. It is trying its best, but it will be hard pressed to meet the target.
In social services, the county council has radically overhauled its policy towards care for the elderly. Shortage of funds has regrettably forced the closure of four residential homes in the county, two of which were in my constituency, but at least the funds raised are being recycled into the social services budget, with significant reinvestment in preventive home care. That will enable more people to be looked after in their own homes, but other schemes cannot be funded because of the shortfall. I pay tribute to the sensitive way in which West Sussex county council social services department has handled those closures, which have been forced upon it.
An increasing number of elderly people are looking for residential or nursing care in our county. There are 5,000 nursing home beds in West Sussex, which is 0.64 per cent. per head of the population compared with a national average of only 0.3 per cent. Again, the figure is double. The problem is worsening. A man aged 65 has a 9 per cent. probability of requiring residential care for the rest of his life, or a 5 per cent. probability of requiring nursing home care. The figures for a woman aged 65 are 13 and 37 per cent.
Given that Worthing has almost twice as many women as men over the age of 60, the problem is compounded in our part of the world. It is a particular problem with the increasing number of people who enter care paying for themselves, but who become a demand on local authorities when their capital falls below £16,000. In the past eight months 140 people, no less, have moved from being self-funded to being supported by public funds.


The cost to the county, so far, has been £700,000, which is a sizeable sum. On present trends, that will increase to £1.6 million in the next year.
We therefore have problems with bed blocking. Currently, 32 elderly people are waiting for placements in residential and nursing home care, 28 of whom are in hospital at a time when there are virtually no available beds in our hospitals. Social services wants to help to reduce bed blocking, but it is caught in a Catch-22 situation. We need special help for special age-related problems.

Mr. Howard Flight: Does my hon. Friend agree that, faced with those problems—and although the social services department has an excellent record—it is monstrous that the gerrymandering of the standard spending assessment funding has resulted in a 10.4 per cent. cut in the social security budget this year, notwithstanding a 7.4 per cent. increase in council tax? Does he deplore what has happened? We were given the lowest award in the whole country and the special transitional grant was not phased into the SSA rollover.

Mr. Loughton: My hon. Friend anticipates the point that I was coming to. We have said that we need special help for special age-related problems, but West Sussex received the lowest Government grant of any shire county in England recently. There was, on the face of it, an increase of 3.8 per cent., against an average of 5.2 per cent., but, as my hon. Friend said, after adjustments for community care funding, nursery voucher abolition and discretionary arrangements, the increase was only 2.2 per cent.
The social services figure is even worse; it suffered a reduction of £4.7 million after adjusting for last year's special transitional grant, which is not to be rolled forward. That is the 10th-lowest increase of all 150 councils in the country and, again, the lowest of all shire counties.
The additional £1.7 million for West Sussex announced only two days ago—it is amazing what an imminent Adjournment debate can achieve—is a small improvement, but it comes at the same time as the teachers' pay award and other new responsibilities for local authorities. It is a drop in the ocean in terms of the deficit on social services alone. Incredibly, the number of people in residential care has been excluded from the calculation of funding needs for people in residential care. Therefore, funding does not take account of people moving into residential care in West Sussex from other areas of the country.
Under Labour's first local government settlement, West Sussex social services had to make savings of £2.5 million, which is almost as much as the total savings for the previous four years put together. It is often assumed that wealthy West Sussex is a soft touch for large increases in charges. However, as the joint review by the Social Services Inspectorate and the Audit Commission observed:
Charges already represent a substantial proportion of gross expenditure and the scope for greatly increasing income seems limited.
So the nearly poor are paying for the really poor. It is little wonder that the recent settlement was condemned in West Sussex, by all parties, as grotesque and devastating.
Other Government changes have compounded the problem. The abolition of tax relief on private medical insurance in Labour's first Budget has particularly affected Worthing, which has the highest number of pensioners with such policies. That has undoubtedly led to an increase in waiting lists.

Mr. Nick Gibb: My hon. Friend explains very well the difficulties faced by the elderly in West Sussex. Is he aware that retired people will suffer severely from the array of stealth taxes introduced by the Government? They will pay £95 a year extra because of the reduction in the value of the married couples' allowance, £50 a year more because of extra duties on petrol, and an additional £75 a year because of the abolition of the repayment of dividend tax credits.

Mr. Andrew Tyrie: Further to the intervention by my hon. Friend the Member for Bognor Regis and Littlehampton (Mr. Gibb), I have received many letters making exactly that point. It is clear that many people in my constituency who are on modest incomes have been hit by the decision to abolish ACT dividend tax credit. The 1997 Budget was disastrous for them. Does my hon. Friend the Member for East Worthing and Shoreham (Mr. Loughton) have the same experience in his constituency?

Mr. Loughton: I completely agree with the points made by my two hon. Friends. The abolition of dividend tax credits will affect more than 300,000 people nationally. Many of my constituents are the typical victims of that measure. Those people may have just a few shares. They may, on the face of it, be asset rich in that they own their own home and a few shares from privatisations or building society demutualisations, but they are income poor, and to take away a large chunk of that income exacerbates their poverty. Despite the Paymaster General's assurances that there are alternatives, there are none for those people.
Honest attempts by poorer pensioners in West Sussex to save in retirement and for their retirement to enable them to stand on their own two feet have, through recent stealth tax changes, been dealt a blow by an intransigent Government.
Many people in West Sussex may be forgiven for thinking that the Government are Sussexist. I should like to pay tribute to hospital and social services staff across the county for the excellent job they are doing in difficult circumstances. I also pay tribute to our county council staff for their sensitivity in handling these appalling settlements. When West Sussex suffers, our poorer pensioners, in abundance, bear the brunt. I ask the Government to give proper recognition to the very real and growing funding problems that go with having such a high population of pensioners in our county.

Mr. Peter Bottomley: rose—

Mr. Deputy Speaker (Mr. Michael J. Martin): Order. I am sorry, I cannot call the hon. Member for Worthing, West (Mr. Bottomley). He has not intimated that he wishes to speak.

Mr. Bottomley: If I have done wrong, I apologise. My impression was that, if one stood up during the debate,


one had the opportunity to be called, if the Minister and the hon. Member who had secured the debate would allow.

Mr. Deputy Speaker: Does the hon. Gentleman have the Minister's permission to speak in the debate?

The Parliamentary Under-Secretary of State for Health (Mr. John Hutton): Yes, Mr. Deputy Speaker.

Mr. Peter Bottomley: I congratulate my hon. Friend the Member for East Worthing and Shoreham (Mr. Loughton) on his initiative. I hope that the Minister and his colleagues will agree to meet a deputation from the organisations that are concerned with the illnesses and circumstances of the elderly. We know that we cannot change the rate support grant settlement for this year, although the extra £1 million is welcome. If, in the years to come, we face the prospect of more and more money being taken away from social services and less and less money being available as increases for the health services, people with Alzheimer's and Parkinson's disease and others will be hurt.
In praise of Government Departments and people in West Sussex, I should like to refer to a letter that I received today from a mentally ill constituent, who says that the voluntary and statutory services have combined to give him a fuller life than he had elsewhere. We should like to receive such tributes more often, but to provide such services requires resources.

The Parliamentary Under-Secretary of State for Health (Mr. John Hutton): I congratulate the hon. Member for East Worthing and Shoreham (Mr. Loughton) on securing this important debate. I welcome the tribute that he paid to NHS and local authority staff in West Sussex. I am aware that a high proportion of older people live in West Sussex, especially in the hon. Gentleman's constituency and the surrounding area. That has an impact on social care and local health services, and I welcome the opportunity to discuss the way in which our policies and our positive agenda will improve vital services in the hon. Gentleman's constituency.
Older people make an enormous contribution to our national life, and the Government are determined to ensure that their wishes and needs are taken seriously. We also intend to ensure that older people are valued properly and can play their full part in society as a whole.
The hon. Gentleman has raised some specific issues, and I shall try to address as many as possible in the time available. He referred to mental health pressures in his constituency, but he conveniently forgot to mention the Government's "Modernising Mental Health Services" strategy document, which we published in December. On top of the initial spending that we have allocated to mental health services in Britain, we are making a further £700 million available to support modern mental health services in England. Within that strategy, we have recognised the need for extra beds in the acute sector, throughout the service into the community and in the high-security forensic services. If the hon. Gentleman has time, he should look at our strategy document, and he may draw some satisfaction from it.
The hon. Gentleman also referred to nursing shortages. I am sure that he welcomes the excellent news—which the Secretary of State gave at Health questions yesterday—that nurses not currently working in the NHS have shown significant interest in returning to employment within the NHS. That is a positive response to our advertising campaign. Given that response and the nurses' pay award, we are confident that we shall begin to address the problem of nursing shortages in the short and medium term.
In a thoughtful part of his speech, the hon. Gentleman rightly referred to the charging regime for long-term residential care. That is a fundamentally important issue, and in our White Paper, "Modernising Social Services"— I do not know whether the hon. Gentleman has had an opportunity to read it—we said that we were determined to introduce greater consistency in the charging regimes across local authorities. Given that the royal commission on long-term care is currently examining this issue, it would be appropriate to wait until it makes its recommendations, so that we can have a proper debate about charging policies for domiciliary care and charging regimes for residential care.
I should point out, however, that we inherited the regime that the hon. Gentleman is now criticising and complaining about from the Government he strongly supported. Some of the problems he highlighted did not start on 1 May 1997. We inherited a range of problems with which we are seriously trying to get to grips.

Mr. Tyrie: The Government are making matters worse.

Mr. Hutton: No, we are not making them worse. We are trying to get to grips with the problems in the NHS and in social services. By providing record levels of spending, we are ensuring that those two services receive more resources than they ever received during the 18 years when the hon. Gentleman's party had responsibility.
The hon. Gentleman referred to winter pressures. I am grateful to him for praising NHS staff on their efforts to tackle the acute pressures that the service came under over the winter holiday period. A huge effort was made in West Sussex to ensure that everyone received the necessary treatment and care. I am sure that the hon. Gentleman will join me in congratulating the staff again. A huge amount of collaborative work has been done across health and social care to ensure effective service planning, commissioning assessment and delivery of services to the people in West Sussex.
That effort has paid particular dividends this winter, despite a sharp increase in the levels of illness, especially for older people, which resulted in a huge increase in the number of patients using the NHS. It was better prepared than ever before to cope with those illnesses, and in most places, including across West Sussex—despite what the hon. Member for East Worthing and Shoreham said—most hospitals have coped well with the pressures.

Mr. Loughton: I am interested in the general points that the Minister is making, but he has not addressed the fact that West Sussex has effectively had a £4.7 million cut in its social services budget and West Sussex health authority has by far the longest waiting lists of any health authority in the country, with one in seven of our people


waiting for more than a year. That does not sound like a good modernising deal for my constituents in West Sussex.

Mr. Hutton: I will address the hon. Gentleman's points in the course of my remarks, but I have only just started to try to do so. As he will know, 2,200 schemes are under way nationally. Of those, we have supported 28 schemes in West Sussex, with the help of an additional £1 million from the resources which the Government made available before Christmas. Those schemes include £70,000 for a project in the hon. Gentleman's constituency of Worthing to reduce medical and acute admissions for the elderly; £31,000 for rehabilitation to be provided in residential establishments; and more than £100,000 to fund a medical assessment area, thus preventing admissions to main wards.
The additional money has helped, but we have not stopped there. From the £50 million contingency fund announced by my right hon. Friend the Secretary of State for Health last month, we have provided another £500,000 to support 15 new schemes in West Sussex, including £75,000 for a joint collaboration with social services for a nursing home discharge scheme in Mid Sussex; £20,000, again in Worthing, for the provision of three non-NHS beds at a local rest home to facilitate early discharge; and £10,000 to provide additional elderly care consultant sessions at the Queen Victoria hospital.
We have encouraged health authorities to support joint schemes such as those that I have outlined. Indeed, the local health authority has provided support to West Sussex social services by transferring funds through section 28A of the National Health Service Act 1977, which, as the hon. Member for East Worthing and Shoreham will be aware, has long been a key funding mechanism, also used by the previous Administration, to enable health authorities to support the work of social services. Significant resources have been transferred to assist that process.
This winter we also extended flu vaccinations to all those over 75, rather than confining vaccinations to particularly vulnerable groups. As a result, nationally a third of a million extra doses have been given this year compared with last, and the vaccine remains available. I am sure that many older people in West Sussex have taken advantage of that initiative, and they will have had the opportunity to benefit from the many other initiatives recently announced, including the national lottery new opportunities fund; the renewal of a quarter of accident and emergency departments across the country; and NHS Direct.

Mr. Tyrie: What about the cuts?

Mr. Hutton: The hon. Gentleman who seeks to intervene from a sedentary position got into trouble recently because he made inappropriate remarks to other hon. Members.

Mr. Gibb: I did not say a word and I hope that the Minister will apologise.

Mr. Hutton: I shall not apologise to the hon. Gentleman. Someone on the Opposition Benches is

muttering very rudely and inappropriately. It may be worth reminding Conservative Members that Adjournment debates are usually an opportunity for a proper and friendly exchange of views. I am trying to do that and it is a great shame that Conservative Members seem to have lost their manners.
The hon. Member for East Worthing and Shoreham mentioned the rise in waiting lists and times in his and other constituencies in West Sussex. We are aware of the problems, especially in the orthopaedic service, but those problems did not start on 1 May 1997. I am assured that the hospital to which the hon. Gentleman referred, the Worthing and Southlands NHS trust, is aiming to meet its target for waiting list reductions by the end of March.
The rise in waiting lists and times in West Sussex were as much a consequence of historical financial pressures as of the increasing need for treatment by patients. We are putting that right by investing more in West Sussex. In 1998–99, we invested an additional £6.3 million, which was the largest real terms increase in the then South Thames region. That is not the picture that the hon. Gentleman presented. From the first stage of our £21 billion extra investment, in 1999–2000 the health authority will receive nearly 4 per cent. real growth in funding of some £16 million.

Mr. Loughton: Will the Minister give way?

Mr. Hutton: No, I will not. We are therefore delivering our promises to the people of West Sussex, both with this additional money and also our firm commitment to reduce waiting lists overall. We have provided extra money and we will deliver on our commitment. Nationally, the waiting lists reduced by 136,000, or nearly 10.5 per cent., between April and November 1998.
In West Sussex we have set very demanding targets—some of the most demanding in the whole of England. To their credit, the health authority and the local trusts are getting on with it and have been able to reduce the waiting lists by nearly 4,000 since March 1998. I understand that the health authority is aiming to reduce the waiting lists by just under 28 per cent., or nearly 7,000 patients, before the end of the year. That substantial programme of work includes treating a great many more patients, including treatments targeted mainly at older people, such as those for cataracts.
The hon. Member for East Worthing and Shoreham mentioned problems with cataract surgery. He might be interested to learn that if the figures for the first six months of last year are compared with those for this year, they show that more than 450 more cataract operations have been performed for West Sussex residents. That is a positive and encouraging step.
I know that the West Sussex health authority is keen to reduce waiting lists even further in the next financial year, especially in targeting in-patients, and is currently discussing that with the south-east regional office of the NHS Executive.
The hon. Member for East Worthing and Shoreham mentioned the situation of the local authority in West Sussex. The hon. Member for Worthing, West (Mr. Bottomley) asked whether I would be prepared to meet a delegation. I am always happy to talk to hon. Members about issues to do with social services or the NHS that are my responsibility. If the hon. Member for


East Worthing and Shoreham and his hon. Friends wish to arrange such a meeting, I would be more than happy to try to accommodate them.
I shall comment briefly on the pressures on social services in West Sussex. Resources nationally for social services are increasing by 6.1 per cent. next year, significantly above the rate of inflation. We are targeting a large proportion of that increase at improving the services for older people through better planning and delivery of services across the interface between the health service and social services, and in particular through improved rehabilitation services. I accept that the increase in resources for personal social services in West Sussex will be less than many other local authorities will receive. That is a result of changes to the formula used to allocate national resources for both children's and elderly services between local authorities. Those changes were made as a result of detailed independent academic research and have been fully discussed with all our partners in local government. We now have in place a much fairer and more equitable distribution system.
The hon. Member for East Worthing and Shoreham referred specifically to the problems with institutional care and excluding people in residential care from the standard spending assessment formula. If the SSA calculation reflected the total number of people in institutional care in an area, it would risk giving SSA credit to the wrong authority. Some of the people publicly supported in care in West Sussex are probably not that authority's financial responsibility, because they have been placed in those homes by other boroughs, perhaps from outside Sussex. It is therefore fairer to take no account of the numbers in care, because that does not properly reflect the needs of the population.

Mr. Tyrie: Before the Minister concludes, can he give some comfort for the future and confirm that the proportionate cuts in West Sussex county council's budget will be reversed, so that we can tell our constituents this weekend that there is some hope that the Government will reconsider the issue?

Mr. Hutton: As the hon. Gentleman knows, the ink is not yet dry on the local government financial settlement. Further announcements are due on the subject and he may draw some satisfaction from them.
Unfortunately, we are running out of time for this debate. The hon. Member for East Worthing and Shoreham raised other points that I would have liked to address, and I shall correspond with him about them. We want first-class services for the people who use the NHS and we want the best possible social services that we can provide for people in Britain. That is the whole purpose of our modernisation agenda for the NHS and social services and that applies just as much to the hon. Gentleman's constituents in West Sussex as it does to anyone else in the country.

Mr. Peter Bottomley: On a point of order, Mr. Deputy Speaker. I did not raise the point during the Minister's speech because he was being conciliatory and we wanted to hear what he had to say, but the voices he heard did not come from here. If the problem recurs, you have the ability to refer the matter to the Royal College of Psychiatrists.

Mr. Deputy Speaker: That is not a matter for the Chair

Chemical Engineering Education

Dr. Ashok Kumar: I declare an interest in that I am by qualification and profession a chemical engineer. I was a practising engineer before entering the House. I want to highlight the point that the Government's goal of a modern, competitive industrial nation must be underpinned by competent, well-educated chemical engineers. This week's headline in The Engineer says, "UK students reject Engineering"; they are rejecting it in masses.
I am not alone in recognising the importance of chemical engineering and chemical engineers to our standards of life. The Prime Minister recognised the vital role of chemical engineers in developing and implementing United Kingdom technology in his personal foreward to the recent Institution of Chemical Engineers report "Future Life".
In the global market, the UK has to compete on many fronts. The old certainties and practices that sustained us in the past cannot be called on in the global context of constant technological innovation and emerging markets. However, the UK still possesses poles of industrial strength and expertise inherited from the days when we were dominant. Nowhere is that more true than in the chemical industry. It was the last of the great staple industries to be developed, with names such as ICI and British Petroleum known across the globe. It is still a powerhouse of innovation, applied science and the development of new products.
Chemical engineers work not only in the traditional chemical industry, but wherever chemical reactions and processes are part of the manufacturing chain. That includes the water and energy industries, pharmaceuticals, and food and drink. That roll call shows the need for chemical engineers, whose work affects us all. They clothe us, their drugs heal us, they help to feed us and they furnish our homes and offices. They intimately affect all aspects of our living environment. From fertilisers to plastics, the chemical engineering industry has been a leading producer and developer of new materials for daily life. That is reflected in the markets.
In the UK, the basic chemical engineering industry has a yearly turnover of some £20 billion, making up 1.7 per cent. of our total gross domestic product. If we assess the added value of finished products, that figure can be quintupled. There are also links to process engineering and contracting, which is one of the UK's less-well-known strengths. That is why major multinational contractors such as Kvaerner, Foster Wheeler, Kellogg, Brown and Root and AMEC have UK headquarters, helping the UK and our balance of payments.
The strategic importance of the UK chemical industry must not be underestimated. The key issue is developing our human potential. Unlike other, older industries, our chemical industry is not a technological cul-de-sac. The constant search for new products, the growth of biosciences, the constant drive to harness natural processes to human benefit, and pioneering work, such as molecular technology, at the frontiers of knowledge, need a flow of dedicated, imaginative, young people who can think laterally, if we are to compete on equal terms with other nations.
The jobs are there. A recent Department of Trade and Industry study showed that there will be continuing demand for high-quality engineering graduates over the coming decade. Chemical engineering students and graduates are often the people who enter higher education with the best A-level scores. While that is a source of pride, it hides the fact that, for many young people, chemical engineering is culturally unattractive. I believe that that stems from environmental concerns that equate the chemical industry with environmental degradation and pollution, and, mentally, with Dr. Frankenstein's laboratory. Nothing could be more wrong.
We live with the environmental consequences of our industrial past. As a Teesside Member, I see that every day, but chemical engineers will be at the cutting edge in the fight to clean up our planet. They are the people who will have to devise and apply environmental techniques. That point should be hammered home at an early age. The chemical industry has long fostered good relationships with schools and colleges. It is important that this is built into the national curriculum for science by demonstrating the links between the things that we all want from society, the market and the work of chemical engineers. New courses dealing with food and drink, agriculture, biosciences and advanced manufacturing must be developed. The courses must set practical, rather than rhetorical, questions about the environment, and demand responses that encourage and develop recycling and reprocessing techniques.
We must also tackle the gender gap in the science classroom. Anecdotally, I am told that the number of young women expressing interest in science courses and allied GCSE paths is very low. Interestingly, the highest proportion of young women graduate engineers are chemical engineers. Gender imbalances are not healthy for our society wherever they occur. We must ensure that broad-based science teaching is as women-friendly as possible.
The key is to get more youngsters involved in science early. The basic problem is revealed by one simple fact. For every 100 five-year-olds who enter a classroom for the first time, only 20 go on to do an A-level. Of them, only 10 go on to study science and technology in higher or advanced education. The percentage of those going on to study chemical engineering is smaller still.
Innovations in the classroom and school laboratory must be matched by innovation in the university seminar room. The steady stream of bright new engineers from our universities finds well-paid jobs. Chemical engineers can command average earnings comparable with or better than those of solicitors, chartered accountants and architects. That is countered by lower salaries and expectations among the academic staff who train these high fliers. The recent Bett committee report painted a gloomy picture of the state of chemical engineering in higher education and the salaries enjoyed there. It found that many university staff were underpaid and overworked. Comparable jobs in the private sector were better paid and often more attractive in research terms. The ever-increasing strain of handling routine administration was also taking a toll.
The logical answer is to ensure that greater esteem is granted to chemical engineering in the university environment. One simple way to do that would be to

review the salary structure. The holy cow of all staff being paid on a single national scale for lecturers and senior lecturers irrespective of discipline must be queried. It does not stand to up to the presence of a competitive market outside the walls of the college or university. A precedent was set by the fact that the medical professions have accepted special pay scales in teaching institutions for clinical specialisms.
The growing shortage of chemical engineering lecturers is demonstrated by a study by the Institution of Chemical Engineers, which showed that of a cohort of 1,500 graduates with firsts or upper seconds over the past 13 years from the five leading UK universities with chemical engineering departments, only seven had gone on to take tenured teaching positions in the UK. Bluntly, we must develop better links between the industry and the universities, and, within universities, between chemistry and chemical engineering departments, as advocated by the Royal Society of Chemistry.
There are good examples of companies such as ICI, Zeneca and Esso sponsoring lecturing positions where salaries are supplemented financially, but the links need to be made at research level. Industry needs more research facilities and should be prepared to pay for them through direct cash sponsorship and by setting up joint research ventures. What research needs to be done, how it is to be conducted and who will pay for it are questions with which both universities and industry must grapple.
While the quality of chemical engineering research and the people engaged in it have been assessed by the Engineering and Physical Sciences Research Council as being fully competitive when compared with other major engineering disciplines, there are signs that that competitiveness is beginning to flag. The official data prepared by the Government's chief scientist Sir Robert May show that the citations in chemical engineering of United Kingdom research workers are falling behind those of researchers in competitor countries.
In recent years, a mismatch has begun to emerge between the strength of the current UK chemical engineering research base, and multidisciplinary and inter-disciplinary areas of interest as exemplified by the foresight programme and the "Future Life" document produced by the Institution of Chemical Engineers. That mismatch needs to be rectified if we are to meet the new challenges and changes in our industrial structure, as the chemical industry restructures around high value-added speciality products and increasingly deserts its old heavy petrochemical base.
Alarmingly, the changes come when the latest Universities and Colleges Admission Service figures show that applications for chemical engineering places are still in decline, with a 10 per cent. drop in the current year. That decline affects all engineering disciplines, but it is a special problem for the chemical engineering profession, as structural changes are occurring in the industries which will require a stream of new graduates.
We have to make chemical engineering more relevant to young people who are considering their careers. In the House, we debate issues of great importance. Often, they are issues that can be resolved and informed only by the work of engineers: how best to bring degraded land back into beneficial use; what are the real issues and the real levels of risk in the genetic modification of foods, which we discussed earlier; what is the best route for effective


recycling of wastes and materials; and how to produce the materials of the 21st century. All those are matters that, if properly studied in our universities, would help both to inform policy makers and to train a new generation of scientists and engineers in problem-solving techniques. Also, the industries that participated in those programmes would receive a real boost.
However, industry also has to realise that participation entails recognising that universities are autonomous bodies with a prime mission to turn out fully rounded and dedicated graduates. That should not deter industry. The needs of industry and the work of higher education are, in the final analysis, totally synergic.
If the UK chemical industry genuinely wants to increase efficiency and productivity, put clear blue water between themselves and their competitors, and make the quantum leap into the development of the technologies of the coming millennium, it must be prepared to contribute to research, and to constant career enhancement and retraining.
I urge my hon. Friend the Minister to study closely the decline in the public funds available for biochemical engineering, which is one of the key forward areas of chemical engineering. I recognise that there is no such thing as a free meal. Society and the House must recognise that we need to consider how best to resource the work of higher education in that area of expertise. Industry, too, must recognise that long-term growth cannot come merely from leeching off research work that is financed and conducted by others. It must recognise its obligations to help that process.
As a Teesside Member of Parliament representing perhaps the one area of the UK where the chemical industry is the cornerstone of the local economy, and as a chemical engineer, I am aware of the absolute dependence of modern society on chemical engineering. It is time to recognise that dependence and to plan for its proper development. Attracting more of the brightest and best from our schools into science and engineering courses is imperative for all of us. While the national curriculum delivers science for every youngster until the age of 16, it has not led to greater participation in science A-levels or higher entry figures to our universities. That is something which the Department for Education and Employment and the Department of Trade and Industry must tackle, directly and quickly.
My hon. Friend the Minister must recognise that we need to tackle the imbalance of courses in our universities. Some subjects are over-subscribed—some people may feel that they contribute to national renewal—while in others, standards have to be dropped merely to fill the places.
In conclusion, the work of our chemical engineers is fundamental to the comfort of our daily life, and to the development of an economic and industrial base that will power the nation into a technologically exciting new century. That work is crucial if this nation is to remain in the front rank of industrial countries and to possess an independent economy. The quality of life of our children, grandchildren and great-grandchildren demands nothing less. Thank you for allowing this debate, Mr. Deputy Speaker.

Dr. Michael Clark: rose—

Mr. Deputy Speaker (Mr. Michael J. Martin): Order. During Adjournment debates, any hon. Member who wants to take part must have the prior permission of the Minister and the promoter of the debate.

The Parliamentary Under-Secretary of State for Education and Employment (Mr. George Mudie): I am happy to allow the hon. Gentleman to speak, Mr. Deputy Speaker.

Dr. Michael Clark: Thank you, Mr. Deputy Speaker, and I also thank the Minister. I will only take one minute, as I am encroaching on the hon. Gentleman's time. I congratulate the hon. Member for Middlesbrough, South and Cleveland, East (Dr. Kumar) on securing this debate and on the way in which he has presented it. The hon. Gentleman serves on the Select Committee on Science and Technology. He brings his skill and expertise in chemical engineering into that Committee and is an invaluable member of it. When I worked as a chemical engineer, I did so in his constituency, and I do not need reminding of the importance of chemical engineers, although I welcomed the opportunity to hear the concise way in which the importance of that profession was put before the House.
I will bear in mind my promise to speak for only one minute. I have made my main points, and I again thank the Minister and the hon. Member for Middlesbrough, South and Cleveland, East for allowing me to do so.

The Parliamentary Under-Secretary of State for Education and Employment (Mr. George Mudie): I thank the hon. Member for Rayleigh (Dr. Clark) for those kind remarks about my hon. Friend the Member for Middlesbrough, South and Cleveland, East (Dr. Kumar). He has done the House a service by raising this important issue. Indeed, I believe that this is the first time that chemical as opposed to general engineering has been discussed on the Floor of the House. As my hon. Friend was a chemical engineer before he entered the House, he is uniquely placed to comment on that important sector of the United Kingdom economy. His constituency in Teesside contains the largest concentration of the chemical industry in the UK, which adds to the authority with which he speaks.
Chemical engineers have an important impact in virtually all areas of life, being found in industries as diverse as oil refining and health care. The contribution that they can make to developing an economically viable, but environmentally more friendly world is clearly set out in the thought-provoking "Future Life" report, which was produced by the Institution of Chemical Engineers, to which my hon. Friend referred.
"Future Life" identifies a host of challenges that face our society. For instance, it forecasts the design of smokeless cars and the development of biosensors to detect diseases before they become critical. It anticipates the need to recycle "grey" water from baths and washing machines, and to intensify agricultural production to meet the demands of an expanding population. Therefore, chemical engineers are central to improving the quality of our life. Their education and preparation for the world of work are critical to our future prosperity.
My hon. Friend raised a number of matters with which I shall try to deal in the time available. One was the supply of graduates. It is encouraging to note that the overall trend line for recruitment to chemical engineering courses is positive, with 1,141 students entering university to read the subject in 1997. A recent research study by the National Institute of Economic and Social Research into supply and demand for engineering, science and technology graduates, which is to be published shortly by my Department, indicates that the number of students entering engineering degrees is adequate. The study concluded that, with the possible exception of electronic engineering,
the great majority of mismatches between supply and demand for technical graduates are attributable to quality problems rather than any overall shortfall in quantity".
Those findings are consistent with feedback from employers—including Glaxo Wellcome—who have made it clear that their concern lies primarily with the quality of the science graduates they recruit, not with the quantity available in the labour market. I shall develop that point later.
Engineering has suffered for too long from a poor image. That problem applies particularly to chemical engineering, as my hon. Friend's reference to Dr. Frankenstein's laboratory so vividly conveys. Therefore, I am delighted by the suggestion that steps be taken to counteract those misconceptions regarding the profession. Although the lead lies with industry, the Government are also playing their part by contributing toward a major long-term campaign co-ordinated by the Engineering Council. That campaign is targeted on presenting a more positive and dynamic image of engineering to children in the early stages of secondary education. Any further initiative by individual professional bodies, such as the Institution of Chemical Engineers, to reinforce that message would be much appreciated and warmly welcomed by the schools sector. I should also welcome early intervention in the schools sector on any occasion by hon. Members who are aware of the industry's problems with recruitment.
Recent reform of the education system will also encourage more students to enter science in the coming years. All secondary school pupils are now required to take at least one science subject, and 90 per cent. of pupils sitting GCSEs study double science. As part of our reform of the A-level system, the Government will promote a broader curriculum, which will result in more students studying science and technology-based subjects.
On the issue of entry standards, it is pleasing to see that many people are applying to become chemical engineers and that the A-level standards of entrants are high: more than 45 per cent. of entrants to chemical engineering courses have more than 24 A-level points, which is significantly higher than those of entrants to other undergraduate courses. That means that our graduate chemical engineers should be well placed to hold their own against their foreign counterparts.
However, if we are to meet the overall needs of industry, we must address skills demand at all levels. I mentioned earlier the issue of quality, as opposed to quantity. Rather than try further to expand the supply of chartered engineers, industry should examine the level of

skills required, and whether those requirements are better met at incorporated engineer and technician level. The need to provide chemical engineering skills at levels other than that of chartered engineer is illustrated by a recent labour market survey conducted by the National Training Organization for the Chemical Manufacturing and Processing Industry. That survey found that the greatest number of vacancies were for manufacturing professionals, process technicians and process operators.
Among the engineering professions, chemical engineering is conspicuous for historically having little or no output of incorporated engineers, and it is time that that gap was plugged. The development of an incorporated engineer degree programme, and the introduction of non-accredited courses for chemical engineering and chemical technology would be an effective response to employer demand for skills at that level. Employers might also increase their stock of technicians by broadening their recruitment channels to include those who have completed a higher national diploma or higher national certificate. In response to the growing demand for technician-level skills identified by the skills task force, my Department has recently announced a significant expansion of sub-degree places.
I am delighted that my hon. Friend has drawn attention to the fact that chemical engineering attracts a higher proportion of women than do other engineering disciplines. As well as celebrating that achievement, should we not be analysing that attraction and promoting the positive features more widely? Female participation rates in chemical engineering courses are roughly double the rates in other engineering disciplines. The proportion peaked at 28 per cent. and is now running at about 25 per cent., although that is still too low.
My hon. Friend raised the question of course content, and it must be acknowledged that one obstacle to widening the base of chemical engineers has been the tendency of courses to focus too narrowly on traditional industries such as oil, petrochemicals and industrial gas. I shall expect the proposed review of course content to keep pace with economic developments and address the needs of other industries that draw extensively on chemical engineers, such as food and fine chemicals.
Knowledge alone is not an entry ticket to employment. Feedback from employers clearly indicates that many graduates lack key skills required in the workplace: a common criticism made by employers recruiting graduates in chemistry, industrial chemistry and chemical engineering is that recruits are simply not ready for the world of work. My Department is taking steps to improve their employability by responding to the concern expressed in the Dearing report about the lack of key skills. In coming years, many more graduates will emerge from higher education with competency in the six skill areas most commonly sought by employers: management, communications, team working, problem solving, numeracy and information technology.
Employers' general complaint about graduates is that they lack first-hand experience of work, and so tend to have unrealistic expectations and little awareness of what is expected of them. In response, my Department is spending £1.5 million on the development of high-quality work experience projects in the period 1998 to 2000. To ensure that the momentum is sustained, my Department


has supported the establishment of a national centre for work experience run by the National Council for Industry and Higher Education.
The skills and industrial knowledge of university staff are also an important influence on the quality of graduate supply. They are best kept up to date by improving links with industry. The recently announced higher education reach out fund, or HEROIC, will provide significant impetus, injecting a further £50 million over the next three years. That initiative, which is jointly funded by my Department and the Department of Trade and Industry, aims to improve the employability of graduates, the use of graduate skills made by business, and the transfer of technology and knowledge between higher education and business.
I note my hon, Friend's suggestion regarding differential salaries for university lecturers, but terms and conditions of employment for all university staff are a matter for employers. The Government await the outcome of the Bett report, which has not yet been officially published. My hon. Friend has suggested what that outcome will be, and I should be interested to hear how he came to know so many of the details. However, university salaries are a matter for employers and any money needed for that purpose will have to be drawn from funds allocated under the comprehensive spending review settlement.
I am aware of concerns regarding the geographical spread of chemical engineering courses and that the problem may become more acute if a higher percentage

of students choose to attend their local university. The launch of regional development agencies in April this year will provide an opportunity to safeguard and, I hope, to expand provision that meets local needs. One of the RDAs' first tasks will be to agree a regional economic strategy in conjunction with key stakeholders. In regions such as the north-east, where chemical engineering is critical to the success of key industries, we would expect the regional economic strategy to include an analysis of that sector and to specify steps to tackle any problems.
I thank my hon. Friend for working hard to raise important matters relating to chemical engineering, which is a vital and important part of our economy. Like other sectors of engineering, chemical engineering lacks in public perception the glamour of other occupations, but the reality is that it is exciting and challenging, and offers participants a fine career. I hope that my hon. Friend's speech today inspires youngsters to enter the industry.

It being Two o'clock, the motion for the Adjournment of the House lapsed, without Question put.

Sitting suspended, pursuant to Standing Order No. 10 (Wednesday sittings), till half-past Two o'clock.

PRIVATE BUSINESS

CITY OF LONDON (WARD ELECTIONS) BILL (By Order)

Order for Second Reading read.

To be read a Second time on Tuesday 9 February.

Oral Answers to Questions — INTERNATIONAL DEVELOPMENT

The Secretary of State was asked—

Tobacco Control

Mr. Cynog Dafis: What resources will be made available by her Department for organising negotiations to establish an international framework convention on tobacco control. [67502]

The Parliamentary Under-Secretary of State for International Development (Mr. George Foulkes): We are concerned at the ways in which tobacco products are being promoted in developing countries and have offered our support to the World Health Organisation in its work on an international framework which includes a global ban on tobacco advertising. We particularly welcome the strong lead the new director general, Dr. Gro Harlem Brundtland, has taken on this issue. I can also confirm that our Department does not fund any activities that support the tobacco industry, but we do help farmers currently dependent on tobacco crops to diversify.

Mr. Dafis: I thank the Minister for that reply, but does not his Department provide funds for the malaria project—the other priority, along with tobacco, identified by Dr. Brundtland? Is not it absolutely vital that the Department provides resources to enable her campaign against tobacco in the third world to take effect? Does not the Minister agree that it is deplorable that United Kingdom companies, especially British American Tobacco, should target the most vulnerable groups in third-world countries, trading in death and suffering and undermining development at the same time? Is not it important that the Government distance themselves from such organisations and put money into Dr. Brundtland's campaign?

Mr. Foulkes: I sympathise with what the hon. Gentleman has said. It is too early to know exactly what funding is needed for the campaign, but we stand ready to contribute to it. The hon. Gentleman is right to say that developing countries are being targeted by tobacco companies. That is especially unfortunate, as those countries have limited regulations to deal with tobacco and, because they lack the necessary health structures, are ill-equipped to handle the consequences. I assure the hon. Gentleman that we are doing what we can to discourage the targeting of developing countries.

Dr. Norman A. Godman: Is it not the case that the European Union subsidises tobacco growers to the tune of hundreds of millions of pounds per annum? I know that it is not my hon. Friend's responsibility, but should not the Government strive to reduce that obscene subsidy to the fat tobacco growers in the southern countries of the European Union?

Mr. Foulkes: I think that my hon. Friend will have seen the Government's White Paper entitled "Smoking Kills", in which he will have read our comments about

the European Union subsidy for tobacco. The Government do not support it and we have made representations about it. However, although this Department does not have special responsibility for the matter, I shall draw my hon. Friend's remarks to the Minister who has, and I know that they will be taken seriously into account.

Mr. Ian Bruce: Will the Minister look seriously at the conventions in this country governing what the tobacco companies do voluntarily? During the round-the-world Whitbread yacht race, the boat called Silk Cut, which carried no reference to tobacco on its structure, covered up its name in United Kingdom waters. A simple ban on advertising would not have prevented the company from showing that brand name or the names of other tobacco products. Therefore, before rushing ahead to ban advertising, will he consider carefully whether such a ban would be more effective than the conventions prevailing at present with the tobacco firms?

Mr. Foulkes: The hon. Gentleman's specific question relates to the United Kingdom, and could be better dealt with by one of my ministerial colleagues. However, the framework will be an international legal instrument circumscribing the global spread of tobacco products. It will include advertising, and it will take account of issues of the type raised by the hon. Gentleman. It is due to come into effect in 2003, but if we and other countries put a little more political will behind it, that could happen a lot earlier, as I would certainly wish.

Mr. Ronnie Campbell: Is there not a worry that if we stop the subsidy and prevent farmers from growing tobacco, they may move into other, more dangerous crops such as heroin and cannabis?

Mr. Foulkes: That is certainly not the kind of diversification that I would suggest. I can reassure my hon. Friend that a World bank study has shown that the social and health costs of tobacco are far greater than the economic benefits. When it comes to substitutes, consumers are most likely to divert expenditure to other products, and that creates jobs. Those products are not the kind rightly identified by my hon. Friend as equally as dangerous—if not more so—as tobacco.

Aid (EU)

Mr. Desmond Swayne: How much of the United Kingdom's international aid is disbursed on its behalf by the EU. [67503]

The Secretary of State for International Development (Clare Short): We inherited from the previous Administration a commitment that 30 per cent. of my budget should be channelled through the European Commission and a situation in which EC aid spending is both skewed against the poorest countries and often of poor quality. In December, we published our strategy to improve that performance, and I shall happily send copies to the hon. Gentleman. We are actively seeking support for our strategy in the Commission and the European Parliament and among member states. I welcome the report of the Select Committee on International Development supporting the Government's strategy.

Mr. Swayne: What progress has the right hon. Lady made in addressing the concerns of charities that feel that


the budget is skewed towards middle-income countries, leaving a relatively niggardly budget available for the poorest countries? What advantage is to be had from allowing our national priorities to be diluted by expenditure through the European Union?

Clare Short: The hon. Gentleman may wish to be aware that up until 1992, about 9 per cent. of my Department's budget went to the European Commission. The previous Prime Minister, the right hon. Member for Huntingdon (Mr. Major), then negotiated a big increase to 30 per cent. I inherited that position, and there is no use bewailing it. What I must do is try to make aid more effective and ensure that it is targeted much more on poor countries. We are working hard to draw the scandal of the current distribution to the attention of non-governmental organisations, the European Parliament, the different parts of the Commission and parliamentarians throughout Europe. I am grateful for the hon. Gentleman's support for our attempts to put right a matter on which the previous Administration should have made greater efforts.

Mr. Peter L. Pike: To what extent do our European counterparts share my right hon. Friend's view of the need to eliminate debt while also reducing poverty? How highly do they rank those priorities in comparison with her ranking of them?

Clare Short: The European Commission contributed to the World bank's heavily indebted poor countries debt fund, but it is not a big player in that it has no export credit debt to deal with. On the elimination of poverty, it was agreed during our presidency of the European Union that the international poverty eradication target should become the centrepiece of development efforts. That commitment has also been incorporated in the Lomé mandate for renegotiation. There is room for a lot of improvement. We have a commitment in principle, but there is a long way to go to implementation.

Mr. John Wilkinson: Have not the strictures of the European Court of Auditors been particularly severe over the misapplication of the European Union aid budget? Would we not do a much better job by the British taxpayer if we had a purely national programme of aid that could be disbursed towards the hungry and the lean rather than the fat and fraudulent?

Clare Short: The hon. Gentleman is right that the ECA reports have been highly shocking, but the real problems are inefficiency and inability to disburse rather than simply fraud. There are 42 different financial systems at work in the area. That is a disgrace, but it was the previous Administration who made a binding commitment to have a high proportion of our budget spent in that way. I inherited that commitment from the Administration supported by the hon. Gentleman.

Mr. Wilkinson: indicated dissent.

Clare Short: The hon. Gentleman says that he did not support that commitment. That is interesting.
Finally, bilateral programmes are not always best. Countries cannot work in every needy country. We need our bilateral programmes in countries with which we have

close historical associations and we need efficient multilateral programmes. I agree that there is a lot of room for improvement in the efficiency of the EC system.

Mr. David Winnick: Is it a condition of such aid that discrimination against Christian communities should be ended, particularly, for example, in the Indian sub-continent? That matter is causing a great deal of concern and I hope that representation is being made to the authorities concerned.

Clare Short: Absolutely; we all share my hon. Friend's concern about that. We all seek to promote proper respect for human rights in all the countries in which we work. We must be careful about any further step. It is not right to punish the poor of a country for misbehaviour by certain authorities. We cannot just say that we will withdraw aid from a country in which someone is abusing human rights. We must use our influence to have human rights respected. As I said, we share my hon. Friend's concern about attacks on Christians in India.

Mr. Gary Streeter: I congratulate the Secretary of State on what she is saying about the EU aid budget, but more interesting is what she is doing about it. Why did she not do more when she had the chair of the relevant Council during our EU presidency? Does she now regret that her close colleagues in the socialist group in the European Parliament voted against an opportunity to hold the responsible Commissioners to account? Were those not two golden opportunities to sort the matter out, and has she not missed both of them?

Clare Short: I am constantly astonished at the hon. Gentleman's complete ignorance after all this time and at his inability to look at the record of his Administration and the record of our presidency, and to read published documents and the Select Committee's report. The hon. Gentleman needs to do more work and to be more serious about his responsibility; then, between us, both sides of the House can do a better job.

Mr. Streeter: I am delighted that the right hon. Lady has met her vitriol quota for the week. The whole point of the EU is that it does not stand still. She has the opportunity in government to renegotiate the terms on which we contribute to the EU budget. Now that the financial settlement for the next seven years is up for renegotiation, is this not a golden opportunity for her to say that the United Kingdom will withdraw a sum equivalent to our contribution to the EU aid budget until the EU has shown itself capable of running the EU aid programme? Is it not time for the Secretary of State to be decisive? Is she not long on rhetoric and short on action?

Clare Short: I shall speak slowly and then the hon. Gentleman might learn something. The document I am holding sets out the British Government's policy. It spells out everything that is wrong and how it might be put right. The Select Committee on International Development, chaired in a distinguished way by a Conservative Member, has also just looked in great detail into the matter and made a series of recommendations. Those of us who are serious about this are working with other member states and all parts of the Commission and of the


European Parliament to obtain change, having inherited a complete mess from the previous Conservative Administration, supported by the hon. Gentleman—who has the cheek to sit there heckling when he does not read and does not understand what he is talking about.

Mr. Bowen Wells: I thank the Secretary of State for the reception that she has given the International Development Committee's report on the future of the EC development budget. What are the chances of having a single EU Commissioner in charge of overseas development, and of making the aid more efficient and delivering it to where it should go—the poorest of the poor in the third world?

Clare Short: As the hon. Gentleman knows, because he takes these matters seriously, we are at a time of great opportunity because we have to agree new funding proposals and the allocation between different countries. No one country can determine the outcome. We must engage intelligently with these questions and then build alliances between countries, parliamentarians, and so on. As the hon. Gentleman knows, I am working at that determinedly. I know that the Select Committee is, too, and that it is keen to work with development committees in other Parliaments. We also need to involve the NGO community. There is a real possibility of improvements; if we all work together, the chances of securing them—including, I hope, the appointment of a single Commissioner—are good.

Montserrat

Mr. Ben Chapman: What progress her Department has made in helping the islanders of Montserrat to recover from the effects of the volcanic eruptions and to be better prepared for disaster in future. [67504]

The Parliamentary Under-Secretary of State for International Development (Mr. George Foulkes): Last month in Montserrat, I signed the country policy plan, agreed jointly with the Government of Montserrat, which commits us to spend £75 million over three years on its development. That is on top of nearly £60 million provided up to the end of the last financial year.
We have made great progress restoring normality to the 4,000 people remaining in the habitable north and are working to encourage the Government of Montserrat to accept their responsibility to promote development rather than demanding continuous and increasing subsidy from our aid budget.

Mr. Chapman: I congratulate my hon. Friend on the considerable progress that has been made so far in difficult circumstances. Will he outline the extent to which his discussions with the Government of Montserrat touched on the continuing monitoring of the threat still posed by the volcano? What is his assessment of the impact of all this on tourism, which greatly affects the future of Montserrat?

Mr. Foulkes: I am grateful to my hon. Friend. We are funding the Montserrat volcano observatory, with scientists from the British Geological Survey and the university of the West Indies. They carry out regular risk

assessments, and I am pleased to be able to say that the last one allowed us to reoccupy part of the island, which improves tourism prospects. The next assessment will be undertaken later this month, and I hope that it will prove more promising in respect of the volcano.
There is growing confidence in Montserrat: one hotel is already being reopened, another new one is being built, and I hope that if the new assessment is positive, the possibility of reopening the W. H. Bramble airport will become a reality. The future of Montserrat will then be much brighter than it has been for many a year.

Mr. John Bercow: In the light of what the Minister said in his initial answer to the question, why does he think that the Montserrat coroner described the Secretary of State's response to the recent disaster as unimaginative, grudging and tardy?

Mr. Foulkes: I think that the Montserrat coroner said that because he is ignorant. I met him when I was in Montserrat. The hon. Gentleman will know that the jury accepted that the deaths were caused because the people involved moved into areas that were prohibited. I asked the coroner why he had said that the conditions in the shelters had forced them to do that, and whether he had visited any of the shelters, as I have done—but he had visited none of them. I asked him whether he had spoken to staff from the Department for International Development and the governor, but he had spoken to none of them. If the coroner had done his work properly, we would take more account of his comments.

Sudan

Ann Clwyd: If she will make a statement on humanitarian assistance to Sudan. [67505]

The Secretary of State for International Development (Clare Short): Despite the fact that the Government of Sudan have predicted a bumper harvest this year, we believe that Sudan will need humanitarian assistance again. The civil war, which, as my hon. Friend knows, is taking 80 per cent. of the Government of Sudan's budget, is the cause of the suffering. In the past year, we have worked to achieve a ceasefire and to increase international commitment to seek peace. We are also working to increase the effectiveness of the UN co-ordination of humanitarian programmes and to reduce the leakage of supplies to fighters.

Ann Clwyd: I am sure that my right hon. Friend agrees that it is an absolute tragedy that up to 2 million people have died in Sudan from famine, disease and fighting. Why is it, then, that only the European Union has imposed an arms embargo, while the UN Security Council imposes no such embargo? Could it be that some of the members of the UN Security Council are supplying arms to Sudan and that some countries are ignoring the fact that arms are reaching Sudan through third countries? Will my right hon. Friend take some action?

Clare Short: I am grateful to my hon. Friend. I honestly think, as she knows, that the point has been reached where the war has gone on for so long and has caused so much suffering that the international community has almost given up on Sudan, given up on


seeking peace in Sudan and allowed humanitarian aid just to prop up another worsening situation. I think that things are turning somewhat but there is a long way to go. The United Nations special representative is re-engaged and the senior representative of the Secretary-General of the United Nations has visited Sudan recently. The NGOs that are campaigning in New York have also re-engaged.
I take my hon. Friend's proposals very seriously. I assure her that we are doing all that we can to re-engage serious international opinion in seeking a peace in Sudan. I am grateful to my hon. Friend for her support.

Dr. Jenny Tonge: Does the Secretary of State accept that humanitarian aid should also include simple health measures such as the vaccination of children and primary education? As I learned in Sudan, those things cannot be taken away by the effects of war, however hard the soldiers try.
Will the right hon. Lady accept also, in agreeing with the hon. Member for Cynon Valley (Ann Clwyd), that we should make more effort to control the activities of arms brokers, who supply not only the two main sides in the civil war but the Arab militia, which terrorises the population of southern Sudan? When will the right hon. Lady do something through the European Union about arms supply?

Clare Short: On the first question, the hon. Lady knows that we are doing all in our power—I know that she has recently visited Sudan, and I have read her report—to improve the quality of assistance through UNICEF, and other bodies, to children in Sudan. However, it is impossible to run proper development programmes when populations are moving because of fighting. We must maintain the education of children, of course, but what can be achieved is limited because of the consequences of the fighting.
Secondly, I agree with the hon. Lady about arms in Sudan. The problem is that there is a litter of arms spreading across Africa wherever there is fighting, from all sort of illicit sources. It is a major cause of problems and more and more action is necessary to get rid of these arms. However, given the situation in Sudan, that is very difficult. We need a ceasefire and a commitment to peace. As the hon. Lady knows, we are working on that with her support.

Mr. Llew Smith: Can my right hon. Friend tell the House what information the Government received from the American Administration that convinced them that the factory that was bombed in Sudan last August by cruise missiles was producing chemical weapons and not pharmaceutical products?

Clare Short: As my hon. Friend will appreciate, I am not the appropriate Minister to answer his question. Therefore, I have not seen the reports, which I presume exist and to which he is referring. My right hon. Friend the Secretary of State for Defence made a statement on these matters recently and I shall draw his attention to my hon. Friend's question and ensure that he is sent the appropriate material.
There is a continuing campaign on the bombing, which is suggesting that all the medical needs of people in Sudan are the consequences of the bombing. I repeat that

80 per cent. of the budget of the Sudan Government is spent on the war. That is the cause of the suffering, hunger and lack of medical care. It is in the power of the Sudan Government to put that right.

Mrs. Cheryl Gillan: Can the Secretary of State confirm that as much as two thirds of the £28 million that she gave to Sudan in aid last year has been stolen and goes to feed the fighters and not the suffering people in Sudan? Can she confirm also that what she so glibly refers to as leakage is still continuing? For the right hon. Lady, talk is cheap. We have certainly had our money's worth as she goes round pressing the United Nations and others to take action. Will the right hon. Lady tell the House what action she will take? Will she tell the House what she considers to be an acceptable level of theft from the aid budget? We know that for Labour in Europe it is 5 per cent., but 65 per cent. in Sudan is an obscenity.

Clare Short: The hon. Members for South-West Devon (Mr. Streeter) and for Chesham and Amersham (Mrs. Gillan) get the prize for being the rudest Opposition Front-Bench team. The hypocrisy is stunning. We inherited, from the Administration that the hon. Lady supported, a commitment of very high levels of aid contribution to Sudan, no action on peace and massive leakage of food to fighters. We have taken international initiatives on peace and other initiatives that have resulted in much change in the entire United Nations system to try to ensure that food supplies do not leak to fighters. Yet the hon. Lady and her vitriolic friend, the hon. Member for South-West Devon, just stand up, throw around ill-informed abuse and accuse others of being unpleasant.

International Financial Institutions

Mr. Jim Dobbin: What progress she is making in enhancing the role of the international financial institutions in development. [67507]

The Secretary of State for International Development (Clare Short): Since May 1997, we have been working to increase the focus of the World bank, the regional development banks and the International Monetary Fund on human development and poverty eradication. I frequently meet the presidents of those institutions to press that case. We welcome the commitment of the World bank and the African Development bank to the international poverty eradication targets and the IMF review of enhanced structural adjustment programmes which recognised the need to protect spending on health and education.

Mr. Dobbin: I thank my right hon. Friend for that reply. Latin America has dreadfully high levels of poverty and inequality. What is her Department doing to help to alleviate that?

Clare Short: My hon. Friend is absolutely right. Latin America has the most inequality of any area on the planet. It is a middle—income area with vast natural resources, high levels of education and capacity and desperately high levels of poverty. It has to deal with inequality if the poorest are to be lifted out of poverty. We are a


shareholder in the Inter—American Development bank, which does more lending in Latin America than even the World bank. On Monday, we had a seminar in London with the president and chief economist of the Inter—American Development bank to discuss those questions and to drive forward an agenda for Latin America that will systemically reduce poverty.

Mr. Nick St. Aubyn: A multilateral agreement on investment has a vital role to play in raising living standards in the developing world. Why has progress on such an agreement slowed since the Government came to power and what is her Department doing to promote it?

Clare Short: I am afraid that the progress of the multilateral agreement on investment has not slowed; it has completely collapsed. The French have pulled out and there is now no prospect of that agreement being reached. I agree with the hon. Gentleman that an international investment agreement—particularly one that protects the interests of developing countries and gives them access arrangements so that they can attract more inward investment—is highly desirable and a key target for achieving faster development in the poorest countries. Negotiations now move over the World Trade Organisation and are in an analytical phase.

Caribbean (Crop Diversification)

Mr. Barry Sheerman: What action she has taken to encourage crop diversification in the Caribbean. [67508]

The Parliamentary Under-Secretary of State for International Development (Mr. George Foulkes): Together with the European Commission and the Caribbean development bank, we are funding a major programme of agricultural and economic diversification and a banana recovery plan which is essential to ensure that the industry becomes competitive. It is vital that new jobs are created in other sectors, as well as agriculture, and our funds for diversification are encouraging that.

Mr. Sheerman: My hon. Friend knows only too well that it will take time for many of those islands to diversify out of banana production. Will he redouble his efforts, and ask the Prime Minister and the Foreign Secretary to do the same, when talking to the Americans and, through them, the World Trade Organisation? Too many American businesses are using the WTO to harm the interests of the Caribbean banana producers.

Mr. Foulkes: The Prime Minister has heard my hon. Friend's question, and I assure him that the Prime Minister and the Foreign Secretary are very active on that matter. I know that my hon. Friend will be pleased that the compromise reached in Geneva late on 29 January averted the immediate risk of American retaliation against the European Union. We welcome that move to arbitration because it gives the European Union and the United States more time to work towards resolving the dispute without retaliation, which must be in the interests of British industry.

Debt Relief

Mrs. Maria Fyfe: What recent discussions she has had about the relief of debt; and if she will make a statement. [67511]

The Secretary of State for International Development (Clare Short): I have had a number of discussions on debt relief recently, most notably at the annual meeting of the World bank and International Monetary Fund, where I and the Chancellor obtained agreement to a review of the heavily indebted poor countries initiative, and most recently at a meeting with the German Development Minister in Bonn at the end of November. I have also discussed the link between debt relief and poverty reduction with the Synod of the Church of England, and with the two umbrella groups representing British non-governmental organisations. We very much welcome the German initiative on debt, which reinforces our Mauritius mandate by seeking to speed up the implementation of the HIPC initiative, although I remain concerned that debt relief should be more closely linked to poverty reduction programmes. There is a way to go on that.

Mrs. Fyfe: I thank my right hon. Friend for that very comprehensive answer. Does she agree that the Government's success in getting the IMF and the World bank to review the HIPC process must result in speedier implementation in order to help the poor in poorer countries because, so far, progress has been rather too slow?

Clare Short: I agree with my hon. Friend. The commitment to a review is very important. We must hold the IMF and the World bank to it, and ensure that it is conducted quickly. As well as speeding up the process, we must ensure that it benefits the poor. The review concerning Uganda, which has just received debt relief, was very disappointing. As a result of the fall in coffee prices, it is as badly off as it was in the first place. The initiative needs modification as well as speeding up.

Oral Answers to Questions — PRIME MINISTER

The Prime Minister was asked—

Engagements

Mr. John M. Taylor: If he will list his official engagements for Wednesday 3 February.

The Prime Minister (Mr. Tony Blair): This morning, I had meetings with ministerial colleagues and others. In addition to my duties in the House, I shall be having further such meetings later today.

Mr. Taylor: How does the £39 billion extra burden on business in this Parliament square with the enterprise culture? Are the Government signalling right and turning left?

The Prime Minister: No; I would have thought that turning right applies more to the hon. Gentleman's party.


The figure that he quotes is not correct. Indeed, under this Government, we have the lowest ever corporation tax and the lowest ever tax regime for small businesses. In addition, under this Government, we are consigning Tory boom and bust to history, where it belongs.

Mr. John McAllion: Some of us on the Back Benches fear that our karma might be to return in the next life as Scottish Tories. Will my right hon. Friend therefore reassure us that, in this life, this Labour Government will continue, through socialist policies of redistribution, to tackle the massive inequalities in health, in access to decent housing and in wealth, which continue to disfigure and scar our country? Although we all accept that wealth creation is of course essential, may I remind him of the wisdom of the old clause IV, which never let us forget that the only true creators of wealth are the
workers by hand or by brain"?
It is for them that the Labour party was created. It is in their interests that a Labour Government should govern.

The Prime Minister: Let me tell my hon. Friend what we are doing in this life to promote social justice. One hundred and thirty thousand Scottish families will benefit from the working families tax credit, 183,000 people in Scotland will benefit from the national minimum wage, the new deal for the unemployed has halved youth unemployment since the election and child benefit is up by more than 20 per cent. All those policies, opposed by the Tories, have been introduced by this Labour Government. This Labour Government believe that there is no inconsistency between policies that promote business and enterprise, and the pursuit of a more just society.

Mr. William Hague: So who does the Prime Minister think should be the next manager of the England football team?

The Prime Minister: Not the right hon. Gentleman, anyway. I am content to leave that to the Football Association.

Mr. Hague: We all thought that Glenn Hoddle's comments were outrageous and all joined in saying so, but given what the Prime Minister has just said, does he accept for future reference, and on reflection, that there is a limit to the number of things that politicians should poke their noses into—[Interruption.] There is—and that lecturing football associations on whom they should sack is beyond that limit?

The Prime Minister: I really cannot believe that the right hon. Gentleman is raising that issue. Of course, by making the comment himself, he has already commented on the issue. I suggest that he look at what I actually said.

Angela Smith: Can the Prime Minister confirm how many telephone calls have been made to the nurses recruitment hotline since it was set up? I understand that, in the first few hours, there were more than 3,500. Will he pay tribute to Basildon hospital, which, before this initiative, recruited nurses by getting returners to work and paying for their training to get them back into the NHS? However, may I remind him, and ask

him to ensure that he makes it clear, that new money that goes to the NHS must be put into front-line services and the nurses who serve the country?

The Prime Minister: As a result of the pay award that has been made to the nurses, the starting pay for a newly qualified nurse will increase by 12 per cent. In addition, 70,000 junior qualified nurses are to get an increase of over 8 per cent. As a result of our changes, next year two out of three nurses will earn more than £20,000 a year. Moreover, the number of people who have phoned the hotline—the number of calls that have been made—is now more than 7,000. It will take us time to rebuild the national health service, but we are on our way to doing it.

Mr. Paddy Ashdown: The pay rise for nurses is very welcome, but is it not also the case that, on Monday, the Government raided their own funds for modernising the health service to provide nurses with decent pay? Why should better pay for nurses have to mean worse services for patients?

The Prime Minister: But it does not. The modernisation fund has a specific sum of money within it for pay. That is the part that has been used. The rest of the modernisation fund, which is nine tenths of it—£1 billion—is intact and being used for such things as waiting lists, primary care projects, mental health projects, capital projects, doing up accident and emergency departments, and public health and community services. In addition, an extra sum of money is going into new technology in the health service. So the premise of the right hon. Gentleman's question is wrong.

Mr. Ashdown: Well, then, the Government's own statement made in July last year was wrong, because that statement, made in July 1998, specifically gives the purposes for the modernisation fund. It includes, as the Prime Minister has suggested, waiting lists, capital investment, education and training for staff, health education, primary care and mental health. It does not include pay. So I ask the Prime Minister once again: why have the Government taken £100 million out of front-line services for patients when the Chancellor has more than 50 times that sum in his Treasury reserves?

The Prime Minister: I think that that is more than a little churlish. Actually, I forgot to mention, when I gave the figures, that £120 million is going out from the modernisation fund for education and training, in addition to what I have just mentioned. However, in respect of paying nurses more, we happen to believe that giving nurses a better pay rise, attracting more people into the health service, is part of building a better health service. Nurses—such as those to whom I spoke who were getting their training down in Wales yesterday—believe that it is important both that we get modernisation in the health service and that they get the decent pay that they deserve. Under this Government, we are delivering both.

Shona McIsaac: Does my right hon. Friend welcome the massive support, in last night's vote, for reforming the House of Lords, and especially the words of support by the former Tory Prime Minister, the right hon. Member for Old Bexley and Sidcup (Sir E. Heath)? Apart from showing the Tories in


tatters on that issue as usual, does it not prove that the Government want to create a second Chamber fit for the 21st century, whereas the current Leader of the Opposition merely harks back to the 18th, possibly the 17th, or the 16th, or whenever his last reincarnation was?

The Prime Minister: I think it is safe to say that only those on the Front Bench of the Conservative party are arguing the case for hereditary peers. The reasons for the reform are clear and sensible. First, it is wrong in this day and age that, by birth, such people can make laws. Secondly, and equally important, because of hereditary peers, the Conservatives have an in-built permanent majority of three or four to one in one of the two Houses of Parliament. It is plainly right that we should change that situation, which is regressive, backward—looking and unjust.

Sir Archie Hamilton: Does the Prime Minister accept that, for many people in Northern Ireland, the peace process is all take and no give, as far as Sinn Fein—IRA is concerned? Will he put the release of terrorist prisoners on hold until the mutilations and murders stop and the decommissioning of weapons starts?

The Prime Minister: Without repeating what I said in the exchanges last week, it is worth pointing out to the right hon. Gentleman that, were we to bring the entire process to an end, the result would not be less violence in Northern Ireland. I repeat what I said previously: punishment beatings and appalling atrocities were also going on during the ceasefire under the previous Government. However, as I have made clear, the best possible way in which we can push the process forward in Northern Ireland is for all aspects of the agreement to be implemented. We have made enormous progress, and I hope that both sides of the House can work to make more.

Mr. Jim Cunningham: Is my right hon. Friend aware that, throughout the country, under the new deal, youth unemployment has fallen? Is he also aware that, in Coventry, under the Coventry version of the new deal, youth unemployment has fallen by more than 30 per cent? Will he commend the Coventry scheme to the rest of the country? Does he recall that the Opposition voted against the new deal and the windfall tax levy? Should not the Opposition apologise to every young person in the country?

The Prime Minister: As a result of the new deal, the rate of youth unemployment has very nearly halved since the general election—50,000 young people have gone into jobs, and 200,000 or more are going through the programme. That is a good step for the country on anybody's terms. We know that it was opposed by the Conservative party, and that the Conservatives are still opposed to it. They are wrong. They do not understand that high levels of youth and long-term unemployment are a blight on the country's future.

Mr. William Hague: The Prime Minister will know that there is huge public concern about the possible health and environmental impact of genetically modified crops. There was a debate on the subject in the House today. Why have the Government

not accepted the advice of English Nature, which is by law the Government's adviser on those matters, by delaying for at least three years the commercial release of those crops, until more research is done?

The Prime Minister: We are doing research on that, and a Government committee is examining the matter. We must proceed on the best scientific evidence. The potential of genetically modified crops is very great indeed. It is important that we proceed logically and scientifically, not simply on the basis of prejudice on either side of the debate.

Mr. Hague: We agree that we must proceed on the basis of scientific evidence, but the Government are overruling advice about the environmental impact from the expert body which, by law, exists to advise them on such matters.
It has also emerged that there was a meeting at which it was decided to use supermarket loyalty cards to monitor the purchase of genetically modified foods in various parts of the country, and then to monitor the cases of cancer in the corresponding areas. When concerns exist on such a scale, would it not be better to impose a moratorium, and to do so now?

The Prime Minister: I do not think it would be sensible to impose a moratorium. I am informed that the committee is meeting today. It is important that we proceed on the basis of the scientific evidence. These are big issues, and of course there is public concern about them. The first stage of meeting that public concern is to debate the information. I assume that the right hon. Gentleman is advancing the Opposition's position. It is curious that they should ask for a moratorium geared to a particular number of years, rather than proceeding on the basis of the scientific evidence.

Mr. Hague: It is not curious that the Opposition are asking for a moratorium—English Nature is asking for one. [Interruption.] It is no good Labour Members sneering about English Nature. That body is paid by the Government to give advice on these matters. The effect of the muddle in Government policy is to increase public concern, not to decrease it. Why do the Government not do the common-sense thing, listen to the advice of their experts and at least put on hold the release of new and unfamiliar seeds until the research is done?

The Prime Minister: I think that it would increase public concern if we adopted the course of action that the right hon. Gentleman advocates. A Government committee is looking at the issue on the basis of scientific evidence, and I think that that is the best way to proceed. The worst way to proceed would be to raise fears in the public mind before the evidence is put before the people. With the greatest respect—I do not think that this should be a great political issue between the parties—the right hon. Gentleman's course of action is wrong. I think that it is far better and more important to proceed on the basis of scientific evidence.
As for food safety issues—far be it from me to accuse the right hon. Gentleman of opportunism—I point out that most of the main problems with food safety in this country have resulted from the Conservative Government's legacy.

Mr. Michael Connarty: Is my right hon. Friend aware that his Government today


allocated an additional £112 million to guarantee places for 60 per cent. of three-year-olds in pre-school nurseries in Scotland? Will he take the opportunity, when he makes his welcome visit to Scotland on Friday, to remind parents, teachers and educators in Scotland that the Labour party is the only party in Scotland with published policies for Scottish education, and ask them to sit down in a spirit of co-operation and realise the vision that is set out in Labour's excellent document "Targeting Excellence: Modernising Scotland's Schools"?

The Prime Minister: My hon. Friend makes a very important point. The increase of £112 million for pre-school education will allow many more three and four-year-olds to attend nursery school in Scotland. Some 100,000 children in Scotland will receive grant-funded pre-school education in the next school session. We are the only political party in Scotland with proposals that increase the amount of nursery education. There can be no more important start for Scottish children than getting the education that they deserve.

Mr. Richard Livsey: Will the Prime Minister do everything in his power to assist the 750 employees of Lucas-SEI in Ystradgynlais in my constituency who are about to lose their jobs because of the closure of the manufacturing plant? Does the Prime Minister propose to visit this stricken community, whose people are the salt of the earth? Will he comment on the activities of the chief executive of Lucas Varity, Victor Rice, who stands to benefit by £17 million from the takeover by TRW? Does the Prime Minister not think that that is the unacceptable face of global capitalism at work?

The Prime Minister: As the hon. Gentleman probably knows, Ministers are in discussion with the company and we will do all that we possibly can. We sympathise very much with anyone who risks losing his or her job as a result of the sale. It is important to see what we can do and, as soon as we are able to give details, we shall do so.

Mr. Harry Barnes: I welcome the fact that the Minister of State, Northern Ireland Office, the right hon. Member for East Kilbride (Mr. Ingram), is due to meet Families Against Intimidation and Terror to discuss beatings and intimidation in Northern Ireland. I hope that the Prime Minister will agree to meet that group at a later stage. Would it not be a good idea if Amnesty International and Human Rights Watch were involved in monitoring beatings and intimidation in Northern Ireland and reporting on those events? That would put pressure on the paramilitary groups to back down. Amnesty seems to favour this notion; will the Government give it good passage?

The Prime Minister: The idea advanced by my hon. Friend has also been proposed by the leader of the Ulster Unionist party. It is certainly worth considering, and I look forward to discussing it with the right hon. Member for Upper Bann (Mr. Trimble) later this afternoon.

Mrs. Caroline Spelman: Why does the Prime Minister believe that it is right to levy the same food tax on a small corner shop as on a Sainsbury's superstore?

The Prime Minister: I assume that it is a matter of common ground between us that the Food Standards

Agency should be established and that the cost should not be borne entirely by the taxpayers—although they bear the majority of it at present. The question is whether it is better to do that by a flat-rate or a graduated charge. That is one of the issues that will be considered during the consultation process. We proposed the idea originally because we thought that it would be much simpler and easier to administer than a graduated charge. However, that is one of the things that the consultation paper will address.

Mr. Brian H. Donohoe: I am sure that my right hon. Friend will be aware of Volvo's announcement last week on closing its factory in my constituency, with the loss of 450 jobs. Realising the impact that that will have on my constituency and the surrounding area in Ayrshire, he will be pleased to know of the effect of the intervention of a Minister. May I put on record my thanks for the work that has been undertaken by the Scottish Office?
My right hon. Friend will also be aware that, in November, I asked him a question about the air traffic control system at Prestwick. What influence has been brought to bear, and what has been done by the Government, since that question was asked?

The Prime Minister: First, on the issue of Volvo, as my hon. Friend knows, the Scottish Office is having discussions with the company. The potential for job losses obviously exists for reasons that are outside the Government's control, but we will continue to have those discussions.
In respect of National Air Traffic Services, we are firmly committed to a two-centre strategy. I can assure my hon. Friend that one of those centres will be at Prestwick. That is good news for Scotland, and it will ensure air traffic control facilities in Scotland for a long time. I also understand that my right hon. Friend the Minister of Transport has written to my hon. Friend, offering to meet him to repeat these assurances.

Sir Teddy Taylor: Is the Prime Minister aware of the huge suffering being experienced by the people of Gibraltar, who are having great hardship imposed because of an alleged secret deal with the British Government, which, in fairness, the Foreign Office has denied? As he claims to have established a special relationship with the European Union, is there really nothing he can do to protect the Gibraltarians, who are wholly peace-loving people, against illegal, bully-boy tactics by the Spanish Government?

The Prime Minister: We are in fact working very closely with the Gibraltar authorities. As a result of that, and as the hon. Gentleman has probably read this morning, the Chief Secretary in Gibraltar has made arrangements in order to bring this dispute to an end, on which we very much hope there will be proper progress.
In relation to Gibraltar more generally, the position of the Government is unchanged. There is no secret deal of any nature at all. We continue to do everything we can to ease the tension between Spain and Gibraltar. The point


that I always make to anyone from the Spanish authorities is that the best way forward for them in their relations with Gibraltar is to treat those relations with sensitivity.

Mr. John Home Robertson: I am afraid that this is getting a bit like Scottish questions.
Has my right hon. Friend noticed that virtually every unit in the armed forces of the United Kingdom has its share of Scots, that it is not unheard of for English, Welsh and Irish personnel to serve in Scottish regiments and that the British armed forces are all the stronger for that?
That said, has my right hon. Friend read the nauseating words of Colonel Stuart Crawford, the Scottish National party defence spokesman, who describes the Scots Guards as
a quasi-mercenary regiment … tainted by their association with England"?
Will my right hon. Friend condemn the nationalist plan for ethnic dismantling of the armed forces of the United Kingdom?

The Prime Minister: I think that these are not the first of SNP comments on defence that have dismayed people. Quite apart from wanting to dismantle the whole of the defences of Scotland, get Scotland out of the North Atlantic Treaty Organisation, abandon the nuclear protection and a whole series of other things, and as well as not being trusted on defence, the SNP is not trusted on tax and jobs, and it is not trusted with running a Scottish Parliament which it wants to use as a ramp for independence. Scotland and England are stronger together.

Mr. Michael Fallon: Is the Prime Minister aware that, in Kent, North Yorkshire, north London and elsewhere this year, parent will be set against parent, teacher against teacher and governor against governor by his sudden-death grammar school ballots? Is that not simply a class-ridden obsession with structure rather than standards?

The Prime Minister: No; because under our proposals people are able to vote, whereas under the system that the previous Government had in place the decision was made by the local education authority. Given Conservative Members views on local education authorities, I should have thought that they would be with us on this one.

Mr. Stephen Hepburn: Is the Prime Minister aware that Swan Hunter shipbuilders on the Tyne have been offered the chance to submit a bid for one of the Royal Navy supply ships that is out for contract? If it is successful, the £130 million contract will provide many thousands of new, highly skilled jobs on the Tyne for many years to come. Is he also aware that, if it is successful, it will be the first time that ships have been built in the Tyne for many years? To satisfy the companies, communities and trade unions that have worked towards obtaining the contract, will he give an assurance that there will be a level playing field?

The Prime Minister: We are delighted at Swan Hunter's success. It is one of 10 companies that we believe have the technical expertise and capability to build the two new landing ships. It has been passed a copy of the initial draft specification, and has been asked to

provide indicative prices. I cannot say any more about that at this stage, except that the shipping industry on the Tyne has a tremendous and proud history, and it would be great to think that it also has a proud future.

Mr. William Ross: Will the Prime Minister confirm that, during the talks process, Sinn Fein told him and the Prime Minister of the Irish Republic that it could not force the IRA to decommission weapons?

The Prime Minister: No. It is clearly set out in the agreement that decommissioning is part of the agreement, and that Sinn Fein, like every other party, is expected to do what it can to bring about decommissioning. It is bound by that agreement. If I may say respectfully to the hon. Gentleman, it would be foolish of us to agree that Sinn Fein is under no such obligation. It should be under that obligation; it is in the agreement, and we intend to hold Sinn Fein to it.

Mr. John Healey: My right hon. Friend will recall the meningitis outbreaks across the country over Christmas, and may know that in Rotherham we had seven cases in nine days, including two tragic deaths of students at Wath comprehensive school. Is he aware that three quarters of the cases in Rotherham in the past year have been of meningitis type C, for which there is a vaccine? Given that this local pattern is reflected nationally in the growing proportion of meningitis C cases, will he use his offices to encourage the Secretary of State for Health to take a fresh look at the arguments for and against a national vaccination programme?

The Prime Minister: I am sure that my right hon. Friend will have heard my hon. Friend's question. I am not able to give my hon. Friend an answer this afternoon, but I shall make inquiries and write to him about the matter.

Mr. Stephen Dorrell: Does the Prime Minister agree with me that schools should be free, if they so wish, to adopt a policy of selection by interview or examination?

The Prime Minister: My right hon. Friend has set out the Government's position on selection, and I refer the right hon. Gentleman to that. As a result of the Government's policies, there will be greater investment in our schools, which was denied them by the previous Government. Whatever policies are pursued on selection, if there are not enough properly funded, good schools for parents to choose from, children will not get a proper education. The difference between this side and his party is that we believe in an education system for all our children, not just a few.

Mr. Paul Stinchcombe: Does my right hon. Friend agree that there are some ex-service men in the country who have been wrongly deprived of and denied war pensions for many years? If he does, does he also agree that it would be sensible to give back to the Secretary of State the discretion to award backdated war pensions in appropriate and compelling cases—a discretion that was denied by the previous Government?

The Prime Minister: I know that my hon. Friend has an Adjournment debate on this subject. I am sure that my


right hon. Friend will listen carefully to my hon. Friend's claims and representations. We will always consider ways of improving the situation, but we must do so within the Government's overall cost budget. We shall certainly listen to my hon. Friend's representations.

Mr. Andrew Lansley: When does the Prime Minister expect the rate of growth in the United Kingdom economy to return to 3.5 per cent. per annum or better?

The Prime Minister: We have set out our growth forecasts for the Government and, as a result of the

policies that this Government have pursued, we are predicting an increase in growth next year and growth in—[Interruption.] Perhaps Opposition Members could listen to the answers. We are predicting that growth will go over 3 per cent. in two years' time. So the position that the hon. Gentleman outlined is answered. What would be most disastrous, however, is if we were to pursue the policies that he wants pursued, including taking away Bank of England independence, scrapping the new deal for young people, getting rid of the working families tax credit and doubling the national debt. The Labour party will be the party of economic stability, not the boom and bust of the Tories.

Insolvency Act 1986 (Amendment)

Mr. Richard Page: I beg to move,
That leave be given to bring in a Bill to amend the Insolvency Act 1986 so as to disqualify from appointment as receiver or liquidator of a company any person or company called in to carry out a financial appraisal of that company.
My comments today will be almost identical to the words used by Baroness Dean, when she spoke on a similar subject in the other place last week. I was pleased to learn that the Secretary of State for Trade and Industry, in his Mansion House speech, also touched on my concerns. It is nice to know that all minds are thinking in the same direction.
The Bill aims to remove a long-standing problem in our legislation. Under the present law, firms of accountants that are called in by the banks or other lenders to report on companies in difficulties can be, and often are, appointed as administrative receivers if the findings are sufficiently serious. Those firms of accountants are obliged to safeguard the capital of the lenders: they are not concerned about the continuity and survival of the borrowing company. Indeed, all too often, the accountants have a vested interest in putting the companies on which they report into receivership.
As long ago as 1992, 30 per cent. of insolvency practitioners recognised that the issue was a real and not just an apparent conflict of interests. It is like giving a judge and jury £10 for every prisoner whom they set free, but £100 for every prisoner whom they find guilty. No one would think that that was a fair law and no one would say that justice was being done under such rules. The same logic applies to the situation today, in which insolvency practitioners are so often the reporting accountants.
Serious mistakes have been made under the present arrangements. One accounting firm investigating a company to whom a bank had lent money reported that it was in serious difficulties. The accountants recommended that their related firm of insolvency practitioners should be brought in to act as receivers. It took the intervention of the Postern Executive group, a group specialising in business recovery, and a report from a second firm of accountants to persuade the bank that a mistake had been made. In due course, the loan was repaid, the secured and unsecured creditors were paid and hundreds of jobs were saved.
I could cite numerous examples, but I shall give only one more. The owner of a dairy business in Pembrokeshire sought the advice of his bank on the value of his stock. He was visited by a 24-year-old accountant who worked for one of the big five. After a single day on the farm, that expert valued the cheese held in the dairy at half the figure the owner had calculated. The visit cost the owner £3,000. The accountancy firm—surprise, surprise—was appointed to act by the bank as the receiver for the business. As events turned out, the receiver could not milk 200 cows a day or keep them in good health for sale and, when the original owner obtained another valuation for his stock, the bank granted him overdraft facilities of £1 million and he was able to save much of his operation.
All those problems flowed from the visit of a young accountant who was inexperienced in farming, but whose firm could have benefited from the dairy business going into receivership. Legal action was unsuccessful, because receivers have a duty of care only to the party that appoints them: the bank. For individuals and companies who face adverse reports, there is, sadly, usually no effective remedy short of legal action. Directors of companies being investigated are all too often presented with winding-up petitions without any opportunity to make representation or any avenue of appeal. That is neither fair nor right. No wonder accountants are often said to exist to kill the wounded and count the dead.
Reputable bodies working in the industry recognise the need for action. For example, the Royal Bank of Scotland has altered its entire approach to companies in difficulties. For it, receivership is the last resort. The results have been dramatic. In 1992, it had an 11 per cent. receivership rate. Four years later, that figure had dropped to only 5 per cent. In 1996, it put only 48 companies into receivership, a fall of 82 per cent. over four years. The more positive approach meant that some 79 companies and almost 5,600 jobs were saved. Even with the companies put into liquidation, the new approach meant that it was possible to sell off many parts as viable concerns.
The key element in the strategy is the bank's decision not to appoint investigating accountants as receivers. It has recognised the conflict of interest that investigating accountants may face and acted to remove it. It prefers to diagnose the problems that borrowing companies face and strengthen their management capability to deal with them. If only all banks would adopt such an approach.
There are wider lessons to be learned for the eight bodies engaged in licensing insolvency practitioners. They should have acted long ago to resolve this issue. My major contention about the potential conflicts of interest that arise when investigating accountants act as administrative receivers was conceded by Lord McIntosh of Haringey speaking for the Government in another place last week. However, I do not accept his repetition of the old argument about the advantages in terms of knowledge that a firm of investigative accountants has about a business when appointed as the administrative receiver. That only perpetuates the existing problem over the conflict of interest.
The promise of legislation to provide for a moratorium on creditors' actions while a company is in difficulties and proposals are formulated is all very well but neither that nor the joint Treasury and Department of Trade and Industry review of the law on company rescue mechanisms promised in last December's competitiveness White Paper offers the remedies that are needed right now, especially as the economy may move into recession.
There have been too many delays in tackling the matter. Those professionally involved, such as the banks, lending institutions and, above all, the companies that have experienced scrutiny by investigating accountants, understand the conflict of interest. The case for independent regulation of those who play both roles, perhaps through an insolvency commissioner, is strong. I prefer effective self-regulation to Government action, but if the eight bodies engaged in insolvency licensing cannot take the necessary steps to end this obvious conflict of interest, the duty to act falls upon Parliament and the Government.
I know that the Government are studying changing the Insolvency Act 1986 and that this issue, as we know from the Mansion House speech, is attracting Ministers' attention. That is all to the good and I welcome it, but action is needed now, not in two, three or four years. The Bill reflects important changes of attitude towards that problem outside Whitehall and Westminster. It provides a solution to that long-standing conflict of interest and I commend it to the House.

Question put and agreed to.

Bill ordered to be brought in by Mr. Richard Page, Mr. Andrew Rowe, Mr. Tony Colman, Mr. Andrew Lansley, Mr. Robin Corbett and Mr. Richard Spring.

INSOLVENCY ACT 1986 (AMENDMENT)

Mr. Richard Page accordingly presented a Bill to amend the Insolvency Act 1986 so as to disqualify from appointment as receiver or liquidator of a company any person or company called in to carry out a financial appraisal of that company: And the same was read the First time; and ordered to be read a Second time on Friday 26 February, and to be printed [Bill 40].

Opposition Day

[5TH ALLOTTED DAY]

Pensions

Madam Speaker: We now come to the first debate on the Opposition motions. I have selected the amendment standing in the name of the Prime Minister.

Mr. Iain Duncan Smith: I beg to move,
That this House believes the Government has failed pensioners and thrown away a unique opportunity for reform; deplores their attack on pensioners through the abolition of the ACT dividend tax credit, which will cost pensioners and all future pensioners £5 billion per year; believes the Government has further hurt occupational schemes by increasing the regulatory and cost burden in the pensions Green Paper; rejects the Government's proposals, which will make pension provision more complex and offer no real security for pensioners in the future; and condemns the Government for their extensions of means-testing in the welfare and pensions system, which will undermine the incentive to save.
Today's debate is an opportunity for us to consider the Government's record after two years of this Parliament to find out whether some of their more grandiose pledges, and perhaps even some of their more sensible pledges, have been met. In opposition, the Labour party said that it would improve the situation for pensioners. We should set out clearly the position that the Labour party inherited when it came into power and decide whether it has improved it.
The Government inherited funded pension provision totalling about £750 billion—more provision than in the rest of Europe put together. Furthermore, between 1979 and 1996, pensioner incomes rose by more than 60 per cent. In 1979, 46 per cent. of pensioners were in the poorest fifth of the population by income distribution, but, by 1996, that percentage had more than halved and less than 20 per cent. of pensioners were in the poorest fifth. While Conservative Members accepted that there was still more to be done, that was a major contribution— all in all, it is a position which many countries in Europe thoroughly envy, as they wish that they had such a strong and powerful position.
What have the Government done from the outset to improve the situation or to make a difference that matters to pensioners? Their first act, almost as soon as they came to power, was to strike a blow at pensioners. In their manifesto they said:
we will support and strengthen the framework for occupational pensions.
I will show that they have done entirely the opposite. The abolition of the advance corporation tax dividend tax credit, which they did almost within a month of their arrival in government, is simply a tax which will cost future pensioners more than £5.5 billion a year. It is the equivalent of 4p in the pound on basic rate income tax. In essence, that means that pension funds will have less money to invest, so pensions will be lower unless employers and employees pay more money into their schemes.

Mr. Gerry Sutcliffe: I do not want to stop the hon. Gentleman' s flow, but he mentioned what


Labour had inherited and the background to today's debate. Will he stick to the narrow subject of pensions, or will he widen the debate to cover the other ways in which the previous Government affected pensioners' incomes, such as putting value added tax on fuel?

Mr. Duncan Smith: The hon. Gentleman will have every opportunity to discuss the Government amendment, which intriguingly avoids the main purpose of the debate, which is to discuss what the Government have done to improve pensioner incomes through pension reform. That is the critical issue. The reality is that, as we have seen in the media and through hon. Members in the House, pensioners will on balance be worse off, not better off, as a result of all those changes. The key point is whether pensioners will be better off as a result of the changes made to pensions provision—that is what we are debating.
Let us return to the withdrawal of ACT dividend tax credit. In doing that, the Government struck a huge blow to pension funds and future pensioners; it is almost impossible to over-emphasise what a blow that was. After that, any pensioner would have been stunned by the blithe statement made by the then Financial Secretary to the Treasury, now the Paymaster General:
People should understand that our reforms will benefit pension funds."—[Official Report, 3 July 1997; Vol. 297, c. 507.]
The Government's own actuaries do not agree with that statement. The Government Actuary's report states:
This reduces the amount of dividend income from UK equities by just under 20 per cent. relative to the previous tax position.
That is a huge blow to anyone whose future retirement income depends on that investment. Even if the Paymaster General cannot add up, she should not assume that others have the same failing.
At a stroke, the new tax rise rendered final salary schemes far more expensive to maintain and thus less viable. I have spoken to one or two funds and it was interesting to discover the extent to which they have been hit. The Post Office pension fund finds itself down by £15 million a year, the Sainsbury pension scheme is less viable by £10 million a year and the railways pension fund is less viable by £30 million a year, all as a result of the Government's actions.

Ms Gisela Stuart: As the hon. Gentleman is clearly concerned about the well-being of those in work who provide for their old age, will he comment on what the previous Government did to the state earnings-related pension scheme and on how, over 18 years, they totally undermined its value?

Mr. Duncan Smith: I am intrigued that the hon. Lady is speaking from her brief from the Whips Office, which tells her to ask that question. What she says is utter rubbish: the reality is that the previous Government have a lot to be proud of in terms of pensions reform and this country's pensions provision is the envy of most of Europe and perhaps of the western world.

Mr. Michael Jack: May I add to my hon. Friend's list of pension funds that will lose money as a result of the changes the Church of England pension fund, which will lose some £12 million? Is he aware that other

Churches are taking actuarial advice on the impact on their pension funds? Already, the Church of England anticipates difficulties with meeting commitments from its latest clergy stipend fund.

Mr. Duncan Smith: My right hon. Friend is right—I shall with alacrity add the Church of England to my list. I omitted to mention many names on the list, because to read them all out would have taken at least 10 minutes. Even local government now faces huge difficulties because of what the Government did. It cannot be understated how hard the changes have hit many pension funds.

Mr. Dale Campbell-Savours: Will the hon. Gentleman give way?

Dr. George Turner: Will the hon. Gentleman give way?

Mr. Duncan Smith: No, I shall not give way. Labour Members do not like what I am saying—as in "Dads' Army", "They don't like it up 'em," but the facts are that the Government's actions really hurt pensioners and that the Labour party did not tell pensioners the truth at the time of the election.
The Government Actuary had to be brought in to carry out an out-of-sequence review, such was the mess wrought by the new tax. The review resulted in a prescription designed to restore some balance to the position on contracting out from SERPS, but the Government then proceeded to make matters worse, which shows how mean-minded and spiteful they are. They chose to freeze the salary-related schemes rebate and to reduce the contracted-out money purchase schemes rebate, which meant that they destroyed one viable option for people and made salary-related schemes even less viable than before. Not content with hurting pensioners through the ACT tax dividend credit withdrawal, the Government went and squeezed them further when the Government Actuary gave them an opportunity to do so.
The Government's first decision on taking power has created chaos and hurt many people. It is important to note that their actions have struck a blow at occupational pension schemes—the very schemes that they said they thought were rather good, which makes their actions not only ironic, but rather stupid.

Mrs. Angela Browning: My hon. Friend mentioned the public sector, but is he aware that the chief constable of Devon and Cornwall police, who received an appalling local government settlement this year, has to make grave choices because of the need to find additional funds to prop up the shortfall caused by the Government's action on ACT?

Mr. Duncan Smith: I agree with my hon. Friend. Like my right hon. Friend the Member for Fylde (Mr. Jack), she has added to the list of examples of the problems and hurt being inflicted on pensioners as a direct result of the Government's actions.

Mr. Nick Hawkins: I, too, should like to add to that list. Small borough councils have also been hit hard, and the hardest hit are those in the shire areas.
They are having to make extraordinary efforts to cope with the stealth tax—the unexploded bomb—that the Labour Government have introduced. Already, local authority pensioners say that they would never have voted Labour if they had known that the Government were going to raid their pension schemes.

Mr. Duncan Smith: I thank my hon. Friend. That is yet another example for the list. However, I urge my right hon. and hon. Friends to restrain themselves slightly on this matter, as otherwise we shall never move on. The point has been made absolutely clearly: pension funds and future pensioners across the country will suffer as a direct result of the mean-mindedness of a Government who never revealed what they intended to do.

Mr. Campbell-Savours: The hon. Gentleman has made his case powerfully, and it is clear that he feels very strongly about the matter. According to the Opposition motion, we are talking about £5 billion. Does he intend to reverse the change in the law at the next general election? Will he go into that election with such a proposal?

Mr. Duncan Smith: The hon. Gentleman has been here long enough—

Mr. Tony McNulty: Yes or no?

Mr. Duncan Smith: I shall answer that question because I am intrigued by Labour Members. The Government have been in power for two years, but already they are trying to decide whether to vote Conservative at the next election. It is absolutely amazing. The hon. Member for Workington (Mr. Campbell-Savours) still does not know how he will vote, yet he is clearly en route to a decision. The hon. Gentleman knows as well as I do that, when we get back into power, we shall take whatever decisions are needed to rectify the problems facing pensioners. He must wait patiently, for we will make our proposals in time for him to make his decision about how to vote at the next election.
Throughout their first 18 months in power, the Government have meandered through their pensions review. Month after month, they have promised a Green Paper. They have even put on road shows, which were supposed to be shows on the road to Damascus—although some of them seem to have got lost somewhere on a wet night in Dudley. However, those shows never got anywhere. Despite their great promises, it has become clear that members of the Labour party had done no thinking about pensions reform in opposition and that they are trying to find a solution now that they are in office.
There was one exception—the right hon. Member for Birkenhead (Mr. Field), who now sits, honourably, on the Back Benches. What is most interesting about the review process is that the very man asked by the Prime Minister, both before and after the election, to think the unthinkable and to produce a plan for Labour's first term in office was rapidly sidelined. Sadly, he was not put in charge even of the pensions review. Then—thanks to the Chancellor of the Exchequer and, perhaps, even to the present Secretary of State—he was squeezed out.
The result of that, and of the fact that no real thinking was going on at all, was a Green Paper cobbled together with one eye cocked towards the Treasury's agenda. It looked for a way to get through to the election without too much trouble.

Mr. Steve Webb: Will the hon. Gentleman give way?

Mr. Duncan Smith: In a minute, as I should like to finish this point.
The Government's pensions proposals are in a mess. Rather than creating reforms to simplify the provision of pensions, they have made the system progressively more complex and more difficult to understand. That, in turn, will lead to great uncertainty over future pensions. The Times stated:
New Labour's new pension system was intended to make life simple for savers … Instead potential savers will be confronted with a mind-bogglingly complex array of options".
The Daily Mail said:
Mr. Darling has come out with a muddled and muddling, half-baked set of proposals".
However, if the Secretary of State does not like hearing only from the media, he—and the Under-Secretary of State for Social Security, the hon. Member for Wallasey (Angela Eagle), who is sitting next to him—might like to hear from Mervyn Kohler of Help the Aged, who said:
The Government has let a great opportunity slip through its hands. This pensions review could have made radical changes to a system in dire need of reform; sadly, it does not.

Mr. Webb: If I have followed the hon. Gentleman's argument correctly, I believe that he said that Labour in opposition should have had a fully worked out pensions policy. Is he now promising that the Conservative party will have such a policy?

Mr. Duncan Smith: Labour, when in opposition, should have thought long enough to have produced a policy that they could implement on arrival. I think it is fair to say that. When we get ready to take over Government—it will be very soon—we shall have a plan worked out, and we shall present that plan and implement it. That is exactly what previous Conservative Governments have done, and we shall do it again.

Mr. Campbell-Savours: Will the hon. Gentleman give way?

Ms Stuart: rose—

Mr. Duncan Smith: No, I shall give way later.
There are four main problems with the Green Paper. [Interruption.] Labour Members do not like to hear of such things because they are so used to receiving briefs saying, "The Government are wonderful; intervene on this." They will have to hear the truth today.
There are four main failures in the Green Paper. The Secretary of State will not be surprised to hear that the first is that it massively increases means testing. One of the most significant areas of the Government's pensions proposals is the growth of means tests on pensioner


incomes. The introduction of the minimum pensions guarantee and the Green Paper's pledge on the guarantee—
Over the long term, our aim is that it should rise in line with earnings
mean that the Government are rapidly increasing the role of the means test in pensioner incomes.
The Association of Retired and Persons over 50 claims that:
the Government's own estimates suggest that the number of UK pensioners relying on means tested benefits under the Minimum Income Guarantee could rise from 1 in 5 today to 1 in 4 by 2050.
The Institute for Fiscal Studies, which the Government no longer likes although they used to work with it when they were in opposition, says that the means-tested guarantee "institutionalises means testing".
The Government's reliance on an increasing means-test element will become a massive disincentive to saving as it claws further and further up the line of those who would wish to save. Frankly, anyone on average earnings might as well not bother; they will find that those who did not bother will receive just as much final retirement income.
Meanwhile, the Government preside over a falling savings ratio. They inherited a ratio of more than 10 per cent., but by the time that they leave Government, it will be around 7 per cent. We are at a stage of the economic cycle when the ratio would normally be rising, not falling. They already have the problem that it is going in the wrong direction. Their changes will make that problem worse.
The right hon. Member for Birkenhead has said:
It means that if you don't bother to save you will just pick this
the minimum guarantee—
up in the end anyway. So the Jack the Lads who don't intend saving will benefit.
That is precisely the point: by increasing the level of the means test, the Government have discouraged saving. They leave everyone saying, "Why should I bother?" People who do not bother will get roughly the same income as those who take the difficult choice, year after year, to save money that they could otherwise have spent.

Mr. Peter Viggers: Does my hon. Friend agree that someone who has made no provision might even be better off, because he will receive housing benefit and council tax benefit?

Mr. Duncan Smith: There is no question but that my hon. Friend is right. The point is that anyone on the margins, with below-average income, who tries to save—perhaps putting away 10 per cent. of their income every year—will say, "I am losing that from my yearly spend and the bloke two doors down the road is having a wonderful time, travelling to Virginia and being dumped off the aircraft. One way or another, he is having a wonderful time, and he will receive the same income as I will."

Ms Stuart: rose—

Kali Mountford: rose—

Dr. George Turner: rose—

Mr. Duncan Smith: No, in a minute.
The Government have collective amnesia. The Chancellor of the Exchequer has clearly forgotten his 1993 pledge, when he said:
I want the next Labour Government to achieve what in 50 years of the welfare state has never been achieved. The end of the means test for elderly people.
A few years ago, he made that bold pledge, but the reality is exactly the opposite.
The second fault in the Green Paper is its attitude towards, and its attack on, occupational pensions. I began my speech with a reference to how occupational pensions have been hurt by the Government. The Green Paper states:
Occupational pension schemes are the great welfare success story of this country.
Hear, hear. They were, but, under this Government, they are not.
The Government's proposals for stakeholder pensions are more than likely to discourage employers from setting up such schemes in the future. There is also a serious danger that some employers will close occupational schemes to new entrants and simply offer access to stakeholder funds instead.
The National Association of Pension Funds today said:
Smaller companies will see it as easier and cheaper for them to encourage employees to move into stakeholder arrangements instead of creating occupational pensions.
The proposals in the Green Paper will increase the regulatory and cost burden on employers of maintaining salary-related schemes.
The Green Paper says:
Our proposals to create a framework for stakeholder pension schemes are not intended to change the commitment that employers already have to providing occupational pension schemes.
Yet, the Government's proposals are, frankly, a stake through the heart of salary-related occupational schemes. On the one hand, the Government attacked them through the dividend tax credit, then they dealt them a blow through the rebate, and now they are dealing them a blow in the Green Paper. It is a blow which they will not survive, and for which the Government will stand condemned.

Kali Mountford: The hon. Gentleman makes much of occupational pension schemes, but why, in 1988, did the Conservative Government encourage people into private pension schemes that were not properly regulated and that failed thousands of pensioners in Britain?

Mr. Duncan Smith: What a wonderful intervention from the daily notes yet again—as though that were a real surprise. The previous Government set out to deal with the problem and this Government have continued that action. No hon. Member would think such mis-selling acceptable. The hon. Lady should be careful. I am about to come to what will be the biggest mis-selling scam of the lot, which is in the Green Paper. She should keep quiet for a little and listen because the reality is that she will be thoroughly ashamed of her Government who have set out to defraud the electorate.

Mr. Campbell-Savours: Will the hon. Gentleman give way?

Mr. Duncan Smith: No, not just yet. The hon. Gentleman has had his moment in the sun and that is good enough for him.
The Government have made much about reducing the need for individuals to seek financial advice, so let us move on to the concept of mis-selling in terms of the Government's proposals. The Green Paper's stakeholder proposal lies at the heart of a serious problem as to whether the public, the consumer, will take the right product.
The Government will recommend their product. In encouraging future pensioners to join those cost access terms schemes, which could turn out to be neither the best nor the cheapest investment or, critically, no better than the previous arrangement, the Government will rightly stand accused of mis-selling pensions on a grand scale. Unless the Government are prepared to step forward right now and underwrite their value, which I doubt, future Governments will have to suffer because this Government seem to have learnt nothing from what the hon. Lady has just referred to. The mis-selling to which she has just referred will become small beer in comparison with what the Government are likely to set in train—a huge problem, of which others will have to pick up the pieces. That confusion is the mother and father of mis-selling.
Peter Murray, the chairman of the NAPF, rightly said:
This means confusion for the man in the street and when the consumer is confused, it means misselling on a large scale is inevitable.
The Government will then stand accused, but, more than likely, they will have lost the election. They will be out and someone else will have to pick up the pieces.
The fourth problem strikes right at the heart of the real divide that exists in Government, and it concerns the Government's culture. The Government's ill-thought-through plans in the Green Paper are likely to lead to greater confusion and result in pensioners finding that they are worse off in due course than if no change had been made at all. Particularly badly hit will be anyone who saves on the margins.
Whether the new product is called a lifelong individual savings account, and whether "pension" is substituted for "lifelong", at its heart is the real problem. Almost every commentator now believes that LISAs demonstrate how the Government are pursuing two clear and different agendas in two different Departments. The Times of 27 January stated:
Two departments are trying to run the show instead of one.
The scheme was put forward by the Association of Unit Trusts and Investment Funds. I know that the association was working up this scheme for some time before the Government took office, and it approached the Treasury to discuss it. It is only recently that the Treasury has finally decided to go ahead, and I understand that it was the Treasury that set about leaking the details in the past couple of weeks to bounce the Department of Social Security and force its hand on the matter.
In the middle of all this, we announce our Opposition day debate on pensions, and the Department of Social Security goes into a spin. [Interruption.] I know what the Secretary of State for Social Security is looking for. He is looking for a reference in the document that I have here. It is in fact a rather obscure, vague reference, which says nothing about how the scheme is to operate. We know that it was dropped in by the Treasury; the Secretary of State had no option because the Treasury is running the show.
Knowing that we were to have this debate on pensions, the Department of Social Security went into a spin. The Secretary of State then went charging across to the Treasury and said, "Quick, I don't want to do this debate if they're going to accuse me of having a hidden policy that the Treasury may produce."

Mr. John Butterfill: Does my hon. Friend agree that the LISA scheme being proposed by the Government is very similar to the 401K scheme in the United States, which has been shown to damage pension fund provision?

Mr. Duncan Smith: My hon. Friend is quite right; there are many similarities between the proposed scheme and the 401K. I shall touch on them in a moment if he will bear with me.
The point is that the two Departments are at odds with each other. To try to avoid the split, the Secretary of State for Social Security has decided to get in on the act—

Ms Stuart: rose—

Mr. Duncan Smith: The hon. Lady has already had her opportunity but she missed it; she is not going to get a second chance.
In order to save face, the Secretary of State has persuaded the Treasury to allow his name to appear with that of the Chief Secretary in the written answer. The fact that the policy has been worked up away from the Department of Social Security is a clear sign that the Treasury has long since decided that it will take over pensions from the Department of Social Security.
We have here a little advance notice of that. I was concerned. I see the Secretary of State sitting there; he clearly assumes that he is going to lead for the Government in this debate and is going to put the Government's case. He is in charge because he is sitting there. However, the Government amendment to the motion is tabled in the name of "The Prime Minister, Mr. Secretary Prescott, Mr. Chancellor of the Exchequer"—we have heard of him—"Mr. Secretary Cook, Mr. Secretary Straw and Mr. Secretary Blunkett". Where is the Secretary of State for Social Security? Clearly, those further along the Front Bench are trying to send him a message that he has not got yet. I am surprised; it is a very unfortunate way of doing things. Perhaps they should have told him direct that it is a case of "Move over, Darling." I would be much kinder to him and tell him to his face.
The proposals will lead to chaos. The policy worked up by the Association of Unit Trusts and Pension Funds is an interesting one which has some things to recommend it, although there may be problems with it. The problem is not the policy but the framework set up by the Department into which the policy drops and with which it clashes.
For example, the stakeholder scheme is meant to be cheap and it makes no allowance for advice in order to keep costs down. However, the arrival of that alternative scheme means that anyone who has to make decisions about long-term savings will be confused as to what to do


and will need advice but will have to pay for it. In fact, the Secretary of State should talk to his Minister of State who, in The Daily Telegraph on Saturday, said quite clearly:
I would expect the cost of advice to be met by the individual who uses it.
There we have it—the hidden cost. Those seeking advice will have to pay; if they do not, they will be mis-sold something that may be of absolutely no use to them.
The scheme is a pensions vehicle that runs counter to the Green Paper on stakeholder pensions. There is no commonality. The stakeholder pension scheme has at its heart trustees; LISAs do not. What is an ordinary member of the public to make of it? I listened to the Secretary of State on the radio and I heard John Humphrys say that he could not understand a word that the right hon. Gentleman was saying. I admit that I agreed with John Humphrys.
The financial page of The Times, a newspaper not known for its failure to understand financial issues, wrote:
instead potential savers will be confronted with a mindboggling complexity. Anyone on a modest income who has not passed exams as a financial adviser is likely to bury their head in despair.
Remember, this is the Government who brought us the Green Paper on the stakeholder scheme, telling us that they would cut the cost of advice. That will not happen if the Minister of State gets his way.
David Dunne, the head of production development at NPL, summed up the matter when, conclusively, he said:
I don't see how this can be anything other than a rival to stakeholder pensions but without the trustees. It is certainly confusing. Both will be in effect Government approved bench marked products with low charges and alongside them you will have ISAs … with the customer asking—which is right for me? And that is the point at which advice will be required when one of the features of these proposals had been to get rid of the need for advice and its expense.
Instead, quietly, the Government will make people pay. That is what the Government do not tell people, although they squeeze them none the less.
The Government set out with very big words on their return to office. We were told that they would complete the reform of pensions, delivering a simpler and better system than that which now exists. Instead, we have seen from the Government a disastrous conflict. The Chancellor of the Exchequer's megalomania means that, bit by bit, he wants to take over the whole of government and, increasingly, chaos and a disincentive to save are the results of the Government's policies.
As I have said, the tremendous shift towards a more means-tested system will act as a disincentive to save and will drive more and more people into the means-test trap. It will work against savings for pensions in future. That will be compounded by the ridiculously complex structure that the Government have set up, which will lead to confusion. That confusion will dissuade people from entering the market, especially as they will have to engage advisers at their own expense.
What is worse is that, because the Government now have a series of savings vehicles that carry the stamp of Government approval, and in the absence of any serious advice, they will find that the public will say, "Were we not mis-sold this? Did the Government not suggest to us that this was the best route for us? Did our companies not

say to us that there was nothing that they could do because the Government had said, 'This is where they shall go'?" Given the investment platform that existed when the Government took office, the lack of constructive and, most of all, joined-up thinking places in jeopardy the investment pattern.
There is still nothing from the Government on the remarkably important problem of annuities. The falling value of annuities goes right to the heart of pension provision, but there is complete silence from the Government. Pensioners know that that is the problem for them when it comes to their investment income. We are talking of what will be seen in years to come as the greatest missed opportunity of any Government since the war. They have shirked the tough decisions and they have fiddled. As a result, they have created a pensions regime that will undermine the future retirement incomes of millions of people. It will be for us to make it clear that the alternative is a Government who are prepared to take tough decisions and an Opposition who will knock the present Government out of power, such as the present Opposition.

The Secretary of State for Social Security (Mr. Alistair Darling): I beg to move, To leave out from "House" to the end of the Question, and to add instead thereof:
commends the Government's approach to pensions reform, set out in its Green Paper, Partnership in Pensions; congratulates the Government on its determination to end the scandal of pensions mis-selling and its plans to strengthen the financial regulatory system; commends the Government on its commitment to economic stability and low inflation, which helps pensioners; believes that its reforms to the corporate tax system, which will result in the lowest-ever rate of Corporation Tax, will be in the long-term interests of companies, shareholders and pensioners; and approves of the Government's introduction of the Minimum Pension Guarantee, Winter Fuel Payments, the re-introduction of free eye tests and commitment to concessionary travel for the elderly as part of its strategy to provide security in retirement.
The final flourish of the hon. Member for Chingford and Woodford Green (Mr. Duncan Smith) would have had a little more strength behind it if, in 18 years of power, the Conservative Government had done anything about reforming the pension system. It is remarkable that, in the 35 minutes or so that the hon. Gentleman spoke, he said not one word about the Conservatives' flagship policy for reforming pensions—basic pension plus. He said not one word about it.
We remember that that policy was launched shortly before the general election. We were told that it would be the blueprint for the future. Yet not one word was said about it by the hon. Gentleman this afternoon. Instead, he said that he would be working out Conservative pension policy at the appropriate time. All I can say is that it is just as well that he will have considerable time in which to work out that alternative. On the basis of what he has said this afternoon, I conclude that he has not a clue about what to do on pension reform.
The House will recall that basic pension plus would have cost £150 billion for effectively privatising the entire pension system. That money would have been spent on privatisation rather than on pensioners, and, as a result, many pensioners would have had to rely on the very means test that the hon. Gentleman criticised.
The Conservatives have no policies, so I shall outline the Government's policies and reply to some of the points that the Opposition have made. Our objective is to ensure that as many people as possible who can save do save, and to give them the options to do that.

Mr. David Rendel: The Secretary of State said that the Conservatives had introduced no pension reforms but perhaps he has forgotten that they reformed the state earnings-related pension scheme. As I understand it, the effect of that reform is that, if somebody's husband died on 5 April next year, she would get an average widow's pension of about £33, but, if he died on 6 April, she would receive an average of only £12.

Mr. Darling: The previous Government greatly altered the original intention of SERPS and at the time gave no indication that they were about to do so. We propose further reforms to SERPS, which I shall refer to in a moment, that will be of far greater benefit to people on lower incomes.
I want to emphasise two points that the hon. Member for Chingford and Woodford Green made light of. We inherited not only one but two pensions scandals. The first, obviously, was the mis-selling of pensions, which the hon. Gentleman glibly brushed aside, saying, "Oh, we know about that." Two and a half million people certainly know about that. Ten years ago, we all remember the scandal of Government-sponsored advertisements, which showed a man breaking out of a straitjacket, when the Conservatives tried to tell us that the very act of going private was both spiritually and, of course, materially enriching.
The truth is that 2.5 million people were mis-sold pensions. When we came into office in May 1997, absolutely nothing had been done to clear up that mess. It took our efforts—principally those of the former Economic Secretary, my right hon. Friend the Member for Airdrie and Shotts (Mrs. Liddell), who did sterling work—to convince the pensions industry that it had to clear up the mess and restore the public's trust in it. We got absolutely no help from the Conservatives, whose Government had created that problem.
The second problem that we inherited, which is the root cause of the problems that we face for the future, is that, unless we change our pensions policy as we propose to do, a third of people now working will retire on means-tested benefits. The hon. Member for Chingford and Woodford Green was complaining about the means test and making much of it. He ignores the fact that, during the 18 years in which the Conservatives were in power, means-tested benefits rose from about 16 per cent. of all benefits to 34 per cent. In other words, for all his rhetoric, the Conservatives more than doubled the application of means-tested benefits.
The real scandal is that, if we do not change direction, a third of people now working will retire on benefit. We do not consider that acceptable—

Mr. Butterfill: Will the Secretary of State give way?

Mr. Darling: In a moment.
For that reason, we decided that pensions policy needed to change and put forward our proposals in the Green Paper last year.

Mr. Butterfill: I am most grateful to the Secretary of State. Of course we are all concerned about those who

will retire on means-tested benefits, but we are also very concerned—as I hope that he is—about those who have an expectation of a reasonable pension but whose annuity will buy them a low income, given the current low rates of annuities. The Secretary of State proposes LISAs, which will allow people to save and retain their capital. Will he reconsider removing the inhibitions placed on those with personal pensions who must buy an annuity at certain times and at the present appalling rates, which are depressed by his Government's action, and give those people the freedom to make a wider range of investments? They might do better and the Treasury might benefit from inheritance tax in the end.

Mr. Darling: The hon. Gentleman will know that a discretion is now exercised concerning when someone must buy an annuity. He will also be aware that the Government give tax relief to people to make pension provision because—there is cross—party consensus on this—it is right to encourage people to do so. We must watch, however, that the tax relief that we provide cannot be used to save for purposes other than pensions. The matter of low annuity rates has been raised on several occasions. Yes, they have fallen, but that is a consequence of lower interest rates and lower inflation. I firmly believe—I hope that the hon. Gentleman does not dissent from this—that one of the best things that any Government can do for pensioners is ensure a stable economic background and low inflation. For people on fixed incomes for 20 or 30 years, low inflation is central to helping them enjoy a decent standard of living. I make no apology for being part of a Government for whom that is a central objective.

Mr. John Burnett: Will the right hon. Gentleman give way?

Mr. Darling: I will in a moment. I am very conscious of the fact that this is a three—hour debate, and I want to deal with the Conservative Opposition's point about the abolition of advance corporation tax and tax credits.
The central objective behind these abolitions was to help companies' profitability. The House will be aware that, as a result of removing tax credits, we have been able to cut corporation tax to its lowest-ever level. That will help companies' profitability and therefore benefit investors. Some of the biggest investors in this country are pension funds. Increased company profitability benefits pension funds. [Interruption.] The hon. Member for Bromsgrove (Miss Kirkbride) can squawk as much as she wants, but the fact is that, if we leave companies with more money due to a reduced tax burden, they can decide whether to distribute or reinvest the profits.
It is interesting that no serious commentator is calling on us to reverse this tax change. Most people believe that it was the right one to make. When the hon. Member for Chingford and Woodford Green was tackled on that point by my hon. Friend the Member for Workington (Mr. Campbell-Savours), the hon. Gentleman could not say what the Conservatives would do. Will his reaction be the same as that to the working families tax credit, which the Conservatives have pledged to reverse, resulting in a tax increase for some of the poorest people of £17 a week? Are we to hear yet another pledge, along with the one to remove the independence of the Bank of England? Corporate Britain would be dismayed if that


were the stated objective of the Conservative party. The tax changes that we have made will benefit companies and shareholders and therefore pensioners. That is the right thing to do in the long-term economic interests of the country.

Mr. Duncan Smith: What does the right hon. Gentleman say to representatives of funds that have declared that they are now worse off directly as a result of the Government's policy? They should be given an answer instead of lectures from the right hon. Gentleman about what he thinks they ought to be doing.

Mr. Darling: I have of course spoken to many pension fund managers and companies. When they are asked whether they would like us to reverse that tax change, they all say no, because they understand that it was the right thing to do in the long term. This Government, unlike the previous one, have always taken the view that we should act in the long-term interests of the country.
I note in passing that pension funds performed well in 1998; returns averaged about 14 per cent.

Mr. Duncan Smith: No thanks to this Government.

Mr. Darling: Pension funds have done so well precisely thanks to the economic environment that we are creating.

Mr. Quentin Davies: Will the right hon. Gentleman give way?

Mr. Darling: No, not just now. Knowing the hon. Gentleman, he will want to speak at great length when he replies on behalf of the Opposition. We look forward to listening to him then.
I want to set out our approach to pensions reform. We firmly believe that everyone who can save ought to save. We want to give people the flexibility, the choice and the incentives to do so. A one-size-fits-all approach to pensions will not do; everyone has different requirements. There have been huge labour market changes. In the past, many people had access to occupational pension funds, which are extremely good options for those who are lucky enough to be able to take advantage of them. As the House well knows, however, many people do not have that option. Although personal pensions are certainly a good option for some, they are not so, as we know only too well, for low-paid people or even for some moderate earners.
We believed that, if we were to encourage more people to make provision for themselves, it was necessary to add to occupational and personal pensions, filling a gap. That is why we have introduced the new stakeholder pension scheme. That development was widely welcomed, as was the entire Green Paper, and it remains the case that most people recognise that there is sense in the Government's position.
We have taken a pragmatic approach, recognising that, for people on a low income, there must be an element of redistribution, and that that is best done by the state. That is why we have introduced the state second pension. We believe that moderate and higher earners are better off in

funded pensions, but obviously there needed to be further options available to them because, increasingly, people work for smaller firms that do not have access to occupational pensions, and some people move around a lot more than was usual in the past. We have developed the extra options now available in stakeholder pensions for those very people.
We are ensuring that a range of options—occupational, stakeholder and private pensions—is available to people in this country, so that they have no excuse not to make provision for themselves in retirement, if they can afford to do so. We believe that that is a step-change in attitude on pension provision.

Mr. Burnett: The Secretary of State has recently talked about incentives, but earlier he said that it was common ground that tax relief should remain for pension provision. Does that mean that he acknowledges that it is common ground that tax relief at the higher rate should remain for pension provision?

Mr. Darling: The hon. Gentleman will know that the Government have set out the tax relief available for the stakeholder pension and for other pensions. The Government obviously need to consider that from time to time, but I agree with the hon. Gentleman that it is absolutely necessary to give people proper incentives to save for their retirement. We are determined to give them such incentives.
The big problem that we faced in this country was that far too many people who could save were not saving, and one problem was that there were not enough options available to them. That is why we introduced stakeholder pensions. I believe that most people think that our approach, building on the developments of the past few decades, is right.
The basic state pension will remain in place. It will increase in line with prices, as we undertook in our manifesto, and it will still account for a significant proportion of pensioner incomes for a considerable time to come. Yes, we have introduced a new minimum income guarantee, and I do not apologise for a minute for having done so. I believe that there is a basic level of decency on which people should retire—and if that is a difference between the Labour Government and the Tory party, so be it. We want people to do better.
I do not accept for a minute the glib argument that people would prefer to live on benefit than on a pension for which they have saved during their working life. If people save and build up a pension, they will always be better off than they would be on benefit. If we were to follow the argument used by the hon. Member for Chingford and Woodford Green to its logical conclusion—if we did not provide a minimum pension guarantee and did not uprate that support in line with earnings—those people who were unfortunate enough not to have saved would be left with a lower and lower income. If the hon. Gentleman is really saying that only the threat of destitution will make people save—which was Tory philosophy in 1980—I am afraid that I do not agree with him. I believe that society has certain basic obligations. The scheme that we have introduced is designed to ensure that as many people as possible do not rely on that minimum pension guarantee, but do better than that.
Let me first consider the position of low earners—people earning about £9,000 a year or less. The problem is that, because SERPS is income related, a person earning about £6,000 a year would receive a pension of about £13 a week. By replacing SERPS with a new state second pension, we have doubled the rate at which a person accrues his pension at the lower end, so that the same person would receive about £46 a week—£33 a week extra. That approach has been welcomed not only by a majority of Members of Parliament, but by the industry, which recognises that people on lower incomes are far better off in a scheme under which they contribute to the state. It is recognised that that is better than trying to force those people into a funded scheme, as the Tories wanted to do, which would be manifestly unsuitable.

Mr. Quentin Davies: Will the right hon. Gentleman give way?

Mr. Darling: In a moment.
The House will also recall that, for the first time ever, we have brought into the state second pension 2.5 million carers who were excluded from it. Over time, that will give some of them, after a lifetime's caring, about £50 a week. I believe that that change alone is worthy of support, but we have gone further.
We are ensuring that people on lifetime low earnings will be better off as a result of our reforms. They will be able to accrue a decent pension during their working life, thereby putting an end to the scandal of people working all their life, saving hard all their life and still ending up on benefit. We want to ensure that people who work and save throughout their life retire on a decent income, which they have earned, which they can see building up year after year, and to which they can add.

Mr. Sutcliffe: Will my right hon. Friend give way?

Mr. Darling: The hon. Member for Grantham and Stamford (Mr. Davies) has been champing at the bit; I shall give way to him and to my hon. Friend in a moment.
That firm basis—the basic state pension and the state second pension—is the right foundation. I shall deal in a moment with the help that we are giving to moderate and higher earners to ensure that they, too, make adequate provision for themselves.

Mr. Davies: I am grateful to the right hon. Gentleman for giving way. Will he try to get into the good habit of giving the House the full picture, not just half the picture? He said that, under the Government's proposals, the rate of accrual for SERPS for those earning less than £9,000 a year will double. Will he add, as it is a fact that he has not yet mentioned, that the rate of accrual for those earning between £9,000 and £18,500 will be halved?

Mr. Darling: The hon. Gentleman is wrong about that. I noticed that he said the same thing a few days ago in an interview for a magazine. My hon. Friend the Minister of State has replied to that charge. The hon. Gentleman should read my hon. Friend's response; he will find that he is quite wrong about that.

Mr. Sutcliffe: My right hon. Friend has identified the key difference between the Government and the

Opposition on the carers pension and the poorest pensioners. We held a review and consulted all sorts of groups, involving them in plans for the carers pension. Does not the difference lie in the fact that we listen to people, and the Opposition do not?

Mr. Darling: My hon. Friend makes a good point. The Government considered their pension reform long and hard. When I was appointed as Secretary of State, of course I looked at everything that the Department was doing, including pensions. As I said to the House during Question Time, if there was any delay, part of it was caused by me because I wanted to satisfy myself that our approach was absolutely correct.
I shall deal with the point raised by the hon. Member for Chingford and Woodford Green on the radio this morning. By sheer good fortune, when the Treasury was working up the scheme to which he referred, I happened to be Chief Secretary to the Treasury, and I also happened to be responsible for that part of the Treasury, so I knew about it and I encouraged the work because I was enthusiastic about it. Then, by another stroke of good fortune, I became Secretary of State for Social Security. To complete that good fortune, I still hold the same views as I held when I was Chief Secretary. I was thus able to bring all the strands together into a coherent, sensible pensions strategy, which I believe people will welcome.
The ways in which we can help moderate and high earners to improve their pension prospects are relevant to the comments of the hon. Member for Grantham and Stamford. We believe that people on moderate earnings, as well as those on higher earnings, are far better off in funded schemes. The advantage of the state second pension, as the Green Paper makes clear, is that, if people go into a funded scheme, they can take the rebates with them, which will give them a good boost for their funded pension.
Again, that has been widely welcomed by the industry. I find it difficult to understand how Conservative Members can oppose that. I thought that they believed in the partnership between state, private individuals and the insurance sector. We want them to work together. People recognise that our arrangements will enable those on moderate earnings to be far better off than they would otherwise be.
As I said earlier, we identified the obvious fact that, as labour market conditions change, the pensions options need to be extended. That is why we have introduced stakeholder pension schemes.
I repeat the point that I made on the radio this morning, because the hon. Member for Chingford and Woodford Green was wrong about it then. It has always been the Government's view that people should seek advice before they make pension arrangements. Buying a pension is far more important than buying a house. It is probably one of the most important decisions that people will take throughout their working life. They would be wise to take advice, as the history of the matter shows. No one should be in any doubt about that.
The stakeholder pension provides options that did not previously exist.
The Green Paper makes it clear that we will legislate to provide for trustee-based stakeholder pension schemes. Those schemes will be designed primarily for people who work for small employers who do not have their own


occupational scheme or for circumstances in which employers or another affinity group come together to provide an umbrella scheme for employees. In other words, it will offer benefits that are similar to those in occupational schemes, something that is not possible at present.
We have also provided a new option, and the hon. Member for Chingford and Woodford Green made great play of the fact that we had thought it up a mere moment ago. I know for a fact that we did not, because I was a Treasury Minister when it was being worked up. I refer the hon. Gentleman to paragraph 39 on page 55 of the pensions Green Paper—which I am pretty sure that he had never read until he heard me mention it on the radio this morning. [Interruption.] He admits it. That is why he was wrong on this point. Paragraph 39 is quite a long paragraph, which states in pretty stark terms that the Government intended to publish the proposals that have been published this afternoon. I knew that the announcement was coming when I published the Green Paper in December. Therefore, no one should be surprised that the Government are delivering on a promise that they made about six weeks ago.
The hon. Member for Bournemouth, West (Mr. Butterfill)—who is no longer in the Chamber—said that he thought that the measure is similar to section 401k of the American scheme. That is not quite right. As I understand it, under that section, saving schemes in America can be drawn down at any time. I make it absolutely clear that the new scheme that was announced today will not be in competition with the other stakeholder model partly because it is a pensions vehicle. It is not possible to get tax relief for pensions and then take out the money in advance of a pension. That would clearly be wrong.
The new scheme addresses a particular need. The Conservatives sometimes claim to be in touch with the City—indeed, it looks as though many Conservative Members have returned there to earn a bob or two before the offices close. Many people, who move from job to job and take a far keener interest in their investments than was the case 20 or 30 years ago, want to be able to invest in unit trusts and open-ended investment companies and so on and build up a fund for their pension, which they can adjust from time to time as fund performance changes. I think that there is everything to be said for encouraging people to do that. As I have said on numerous occasions, it must be right for the Government to ask what is changing in the financial services market, how labour conditions are changing and what we can do to ensure that people have as many options to save as possible.
Hon. Members will recall that, in my statement of 15 December, I made it clear that the Government are considering the position of the self-employed and whether they should be compelled to save for their pensions. Part of the present problem is that the choice is between occupational pensions, which the self-employed clearly cannot join; and private pensions, which are not suitable for many people. The more options we provide, the easier it will be for us to be blunt with people and say, "Look, if you want a decent income for your retirement, you must save; you can't expect the state to stand behind you."

That is why I want to ensure that people have options. Some people will save for their pensions through unconventional means—for example, through their businesses or their houses if they are fortunate enough to live in an area of the country where that is possible. Above all, the Government must ensure that people have a range of options. We must increase flexibility to ensure that as many people as possible save. That is our objective: we want people to save more, invest more and to ensure that they can provide for themselves adequately in their retirement.
That is the Government's strategy, which was set out clearly in the Green Paper, "Partnership in Pensions", which we published last December. Today's consultation document adds to that. It is very clear: we are telling people to do the best that they can for their retirement. We are certain that a one-size-fits-all approach to pensions will not do. We must give people more options than they have at present—between occupational pensions and personal private pensions—which is why we introduced the stakeholder pension. We have responded to changing labour market conditions and to a greater sense of awareness among some investors. We want to provide an additional option that will allow people to accumulate sums for their retirement. That is an essential part of any pensions strategy. I repeat that the Green Paper was widely welcomed upon its publication last year. I readily accept that, if people run around for long enough, and prod people enough, they can get someone to grunt and say that they have an odd complaint, but the Green Paper has been widely welcomed because its proposals are right, pragmatic and workable.
On top of that, people should remember that the Government are committed to rebuilding trust in pensions overall by strengthening the financial services industry and regulating it. We are also introducing a new annual pensions statement, which will mean that people will know how they stand for their retirement. Again, that initiative has been widely welcomed.
It is evident from the debate that the Conservatives's attack is completely ill-conceived—their spokesmen give the distinct impression that they have not yet read the Green Paper, even though it was published almost two months ago—and it is abundantly obvious that they have no new ideas of their own. In their defence, however, they plead that they have lots of time to think up some ideas. It looks as though they are committed to repealing the tax changes that we made, which have resulted in the lowest corporation tax for two years. In short, they have absolutely nothing to say on pensions, just as it appears that they have nothing to say about most other matters that concern people.
We are helping today's pensioners. We are clearing up the mess that we inherited from the previous Government. We are building long-term stability. We have established a stable economic regime, which will benefit pensioners and companies and their shareholders alike. We have a long-term pensions strategy, where a lifetime's work and saving is rewarded with a decent pension. I commend the amendment to the House.

Mr. Quentin Davies: On a point of order, Mr. Deputy Speaker. I know the Secretary of State sufficiently well to know that he would not set out deliberately to mislead


the House, but his answer to my intervention was quite inconsistent with page 45 of his own document. I think that—

Mr. Deputy Speaker (Sir Alan Haselhurst): Order. I do not think that that can be a point of order, if it is a point of debate. There will, no doubt, be an opportunity to make that point in the debate, if the hon. Gentleman succeeds in catching my eye.

Mr. Davies: It is a point of order, Mr. Deputy Speaker, because I thought that it might be in the interest of the integrity of the debate if the right hon. Gentleman had an opportunity to catch your eye again to put the record straight.

Mr. Deputy Speaker: It is not a point of order; it is a point of debate and a point of information. I have no doubt that it can be put on the record in the normal way.

Mr. Steve Webb: I note with interest that the Conservatives chose to debate Labour's policy on pensions. I regret that they did not choose to debate Conservative policy on pensions, because we could all have been home by tea.
So far as I can see, there is only one Conservative policy on pensions, which is to be against what they used to be in favour of—means-testing. There is plenty of meat in Labour's pension policy, and I shall address it in three aspects: first, the Government's record to date on pensioners; secondly, what is promised for the rest of the Parliament; and, thirdly, the longer term, of which there has been some discussion already.
The Government have much to be modest about in their record so far. When the Secretary of State made a statement to the House before Christmas, he said:
Under the new Labour Government, Britain's pensioners are £140 a year or more better off'.—[Official Report, 15 December 1998; Vol. 322, c. 761.]
I, with a little help from my friends, describe that as Arthur Daley economics, which shows how long it is since we all watched television regularly.
That figure of £140 a year does not bear much close scrutiny, because it comprises two elements: £40 from lower fuel bills, and £50 for winter fuel payments for people on income support this year and £50 for them next year. If I am not mistaken, the Secretary of State said "£140 a year", but he has counted the £50 twice. If a constituent said, "I hear that you are getting a £4,000 pay rise," a Member of Parliament would reply, "No, it's going to be only £2,000." If the constituent then said, "Ah yes, but I am counting next year's as well," one might feel a bit aggrieved. It is rather dodgy to include the same figure twice.
What have the Government achieved so far for pensioners, through the measures that they have taken? The Government's proudest boast is that they have done two things for pensioners. First, they have cut the rate of value added tax on fuel. We supported that, but what is it worth, on average, to pensioners? My hon. Friend the Member for Gordon (Mr. Bruce) tabled a written question asking what the cut in VAT on fuel from 8 to 5 per cent. would save an average pensioner household. The answer came back, 35p a week.
It gets worse, because the Government cunningly introduced that in August so that it would be reflected in the September retail prices index, which meant that, when pensions went up, they would go up by less than they would otherwise have done. When that factor is taken into account, the written answer says, the average gain to pensioner households from that VAT cut is 20p a week. If pensioners were to save that money for a month, they could buy a lottery ticket, so it is worth having.

Mr. Sutcliffe: In opposition, we prevented the Conservative Government from putting VAT on fuel up to 17.5 per cent., so the saving is double the amount to which the hon. Gentleman refers.

Mr. Webb: The Liberal Democrats supported attempts to prevent the Conservatives from putting VAT on fuel up to 17.5 per cent. However, the Labour Government's record should start on the day of the general election, so I am measuring from that point.
The 20p saving from the reduction in VAT on fuel is welcome but not exactly a king's ransom. What about the winter fuel payments? The Government are spending roughly £200 million on winter fuel payments and there are about 10 million pensioners, so that is £20 a head, or 40p a week. In total, the savings are 20p on VAT on fuel and 40p on winter fuel, which makes 60p a week compared with the Secretary of State's grotesque exaggeration of £140 a year.
I offer the following comment, to be sympathetic and to help the Government. I genuinely believe that, if they go on exaggerating their achievements, when people come up against reality and realise that it does not measure up, they will be disappointed. Rather than give the Government credit for having provided £20 for winter fuel and for having reduced VAT on fuel, they will say, "You have been going around saying that the saving is £140 a year, yet I am not better off by anything like that amount."
The Government will raise expectations if they overstate their case by saying that they are spending £20 billion on health and £19 billion on education, when those sums represent three years added together and all the numbers have been counted twice. People will be disappointed, and that will damage the Government. In a spirit of conciliation and friendship, I urge them to give more accurate figures.
I asked how much it costs to administer the one-off winter fuel payments, and the answer was £12 million. Could that 40p a week not have gone on the pension? I asked how much that would cost to administer, and the answer was nil, so £12 million has been wasted for a few winter headlines.
This policy is patronising to pensioners. Do the Government think that pensioners cannot be trusted to put by 40p a week for their winter fuel bills, and that they must have it in a one-off payment otherwise they may spend it? This is not a sensible way to proceed.

Mr. Rendel: Does my hon. Friend agree that winter fuel payments are unlikely to be made at exactly the


moment when pensioners receive their winter fuel bills? The Government are not even being clever by helping pensioners at the right moment.

Mr. Webb: My hon. Friend is right. When the Government first introduced this policy, many of the payments arrived well into what one would unambiguously call spring.
The Secretary of State tried to defend the £140 a year figure last Thursday when we discussed the operating orders, but he realised that he was on a sticky wicket. The right hon. Gentleman said, "What does the hon. Gentleman know? Pensioners do not smoke like a chimney, so we cannot count the effect of tobacco taxes. Pensioners do not drive as much as other people, so we should not count the effect of petrol tax rises. Pensioners tend not to have private medical insurance, so we should not count that." That attitude is utterly patronising to pensioners. Most of the 10 million or so pensioners are fit and able, and contribute fully to society. Many of them, heaven forbid, have cars and drive. The effect on them of the petrol tax rise is very real, and the Secretary of State should not disregard it.
To arrive at that figure of £140 a year, the Government counted two beneficial items and exaggerated them. They should be set against the tax increases on petrol and tobacco and the abolition of the dividend tax credit, which we debated a few weeks ago. During that debate, my hon. Friend the Member for Kingston and Surbiton (Mr. Davey) challenged the Economic Secretary. He argued that poorish, non-taxpaying pensioners with dividend income will lose on average up to £75 a year. The response he was given was that the Government have introduced an income guarantee for those pensioners. My hon. Friend said, "Yes, but many of them will be disqualified because they have savings." "No, they won't," said the Economic Secretary, "because they won't have that much in capital."
To discover the truth, I tabled a question to the Department of Social Security—unlike the Treasury, the DSS still answers questions—which said that, out of the 300,000 non-taxpaying pensioners with dividend income, 250,000 would be disqualified from the guarantee because they have savings of more than £8,000. The Economic Secretary was wrong, and gave the House an inaccurate impression, inadvertently I am sure. Large numbers of people will lose out, because they will not be covered by the guarantee. The Government's record so far is modest in the extreme and has been grotesquely overstated.
What about the future? When my right hon. Friend the Member for Yeovil (Mr. Ashdown) challenged the Prime Minister during last week's Prime Minister's questions, the Prime Minister made a fatal mistake. He mistook a Government announcement for reality. He said:
In addition to the things… that I mentioned a moment ago"—
the fuel payments and the VAT cut—
from April this year, there will be…concessionary travel."—[Official Report, 27 January 1999; Vol. 324, c. 338.]
Everyone understood him to mean a national system of concessionary travel for pensioners, as proposed by the Deputy Prime Minister. However, although a scheme has been announced, it will not happen this year. It might happen next year. Pensioners hear such announcements or

read about them in the newspapers and, bizarrely, they believe them. To give another example, I met a group of pensioners recently and one of them said, "I see in the newspaper that we are going to get free television licences, so I am going to stop buying licence stamps." I had to say in reply, "No, you might get free television licences next year or the year after, but not yet. The Government wanted a few good headlines, but I am afraid that it will not happen for a while."
The Government love to announce and reannounce things. The 10p tax rate is a classic example—I have lost track of the number of times that has been announced. People believe such announcements.

Mr. Christopher Leslie: On the point about making announcements that people do not believe, is the hon. Gentleman still standing by his party's pledge to spend £28 billion on increasing the personal income tax allowance from £4,100 to £10,000?

Mr. Webb: Many pensioners would welcome a significant increase in the personal income tax allowance, because, at the moment, it is barely above the level of income support. That is extraordinarily low for pensioners and should be increased. The hon. Gentleman asked about our long-term goal, over the course of two Parliaments, of raising tax allowances to £10,000. I used to work for the humble Institute for Fiscal Studies, which has received much praise this afternoon. The first thing I did as an employee of that institute was to examine Conservative allegations that the Labour party would spend £28 billion—strangely enough, it was the same figure—which was calculated by adding together everything it had ever said it wanted to do and assuming that everything would be done in one go in one Parliament. That was absurd. The hon. Gentleman's party regarded it as absurd then and his question is an absurd way to approach matters, too.
The issue of means testing is central. At this point, I wish to introduce the House to my father-in-law. When I see him, he asks me one question.

Mr. Frank Field: Why are you in the Liberal Democrats?

Mr. Webb: Apart from that, he asks me what the point was of saving his money when the person next door gets everything for nothing. He suggested that I should find out how much someone would have to save to match the level of means-tested benefits.
I tabled a question to the Department of Social Security asking what someone would have to have in a pension pot to buy the extra benefits that people on income support receive over and above the basic state pension. They get an extra tenner a week in cash, some £2,000 a year on average in housing benefit, council tax benefit, free dentistry and so on. The answer was that it would cost £41,000 to buy an annuity to match those additional benefits. That means that there is almost no point in people saving £20,000, but if they can save £40,000 they can buy an annuity to provide all the same goodies that someone on income support gets.
The last thing that I am suggesting is that people on income support are well off, but we want to encourage people to save and the over-reliance on means-tested


benefits discourages them. I was shocked to learn that the value of the additional benefits was equivalent to a £41,000 pension pot.
What should the Government have done and what could they do in future? First, they could provide a firm foundation for the basic state pension, not a foundation of sinking sand. By that, I mean that it should rise with age. The poorest pensioners in the land are not the ones entitled to, and getting, income support: they are those who are entitled to income support but are not getting it. The hon. Member for Come Valley (Kali Mountford) nods, because she is aware that the Government are trying to pay income support to more people. I welcome that, but the Government assume in their costing supplied in written answers that 15 per cent. of those entitled to the so-called guarantee will not get it. That means that hundreds of thousands of pensioners will not get a penny from the so-called guarantee. Most of them are over 75 or 80 and would get every penny of the basic state pension for older pensioners. That is why we want a firm foundation for the basic pension. Even a modest rise of £5 for the over-80s and £3 for the over-75s would guarantee putting 40,000 or 50,000 pensioners above the poverty line.
What can we say of the Government's long-term policies? We need a firmly founded basic pension. The Secretary of State said that, under his policies, adding together the basic pension and the state second pension, we will bring people up to the target minimum of about 20 per cent. of average earnings. That is true in the year in which those people retire, but what happens the next year? We do not know how the state second pension will be indexed but, while the basic pension will be linked to prices, the guarantee will be linked to earnings. They will have achieved their goal in 2050 for one year but the year after retirement, those who have got into this wonderful new Government scheme will be back on means-tested benefits; back on the guarantee; back on the chain gang. That is not something to be proud of. It is crazy to get people just up to the poverty line for a year and then let them slip below it.

Mr. Duncan Smith: Does not moving to a means-tested system progressively trap people and bind those who would otherwise have been free of it to a process where they might as well not bother to save?

Mr. Webb: The hon. Gentleman is right in that, if the Government can say, after 50 years of their pensions policies, a quarter of pensioners will still be on means-tested benefits, as we are told by written answers, it is not something to be proud of. Even in 2050, the oldest pensioners will be the poorest, simply because they are women. Unless much changes, women are likely to be poorer than men. The way to get people off means-tested benefits is to tier the basic pension and get the basic pension for older pensioners to subsistence level so that it is worth having in its own right.

Kali Mountford: Many women, especially carers, have no entitlement and are totally reliant on means-testing. Will not the new system take them off that and give them the opportunity of a pension in their own right?

Mr. Webb: The hon. Lady is right to say that, under the proposed scheme, people who, for example, care for

a disabled person for a year will get 90p a week on the pension. They would get about 80p on the basic state pension through credits. By 2050, if they spend their whole lives caring for a disabled person, they will reach old age with a basic state pension based on credits and a state second pension that brings them just to the poverty line for one year only. In the second year, the basic pension will go with prices and we do not know what will happen to the second state pension but the guarantee will go up in line with earnings. They will be back to means-testing. They will not be on a bit of housing benefit but income support. Even if the whole scheme comes in and all the unfunded promises are honoured, such people will end up on income support for every year bar one of their retirement. That is not satisfactory. There may be 10 years to consider their position, but, by the time that they become older pensioners—most women will live to such an age—we want them to have a decent income that does not rely on the means test.

Mr. Viggers: I have attended pensions seminars with the hon. Gentleman and respect his view. Will he expand on his last point? Would not a carer who worked until 2050 and managed to save more than £8,000 be worse off?

Mr. Webb: The hon. Gentleman is right. The Government plan to review the capital limits, and I welcome that. I am sure that the review is in response to the question that I tabled long before the Green Paper. I asked what would be the cost of raising the upper threshold of £8,000 to, say, £20,000. It is negligible, about £20 million or £25 million. The Department of Social Security can spend that in the blinking of an eye. The Government should have done that for this April. At the very least, they should undertake it as part of the review. I welcome the noises from the Government on that front, but much more needs to be done.

Kali Mountford: The Liberal amendment talks of raising expectations, which is what the hon. Gentleman seems to be doing. Can he tell the House how he would fund them?

Mr. Webb: I would be delighted to. The £5 and £3 figures could be funded in a variety of ways. First, one could cap the overall amount of tax relief. The Secretary of State shied away when my hon. Friend the Member for Torridge and West Devon (Mr. Burnett) asked about higher rate relief. We are not necessarily suggesting restricting it to the standard rate, but if one were to cap at a certain amount for the year in which one was putting in tax reliefs, it would greatly simplify the whole system and would not put a huge amount into the pensions of the highest earners. In other words, one could cap at a generous figure, but money would still be freed up for the oldest pensioners, who are also the poorest.
Secondly, we support price indexation of the basic pension for the under-75s. Every year, pensions increase in line with prices for a large number of pensioners, but the income—national insurance contributions—more or less increases in line with earnings, which creates extra revenue each year. That would be another way to fund the proposals. There are many ways to fund schemes on that scale. If older, poorer pensioners are a priority, those are the sorts of places that we need to look.
The Government have grotesquely overstated what they have done so far on pensions. There is more to come and we welcome extra help for the poorest pensioners, but the reliance on the means-tested approach is excessive. We hope that the Government will respond positively and will seriously consider our constructive proposals to tier the basic rate pension not merely for next year, but as a long-term strategy that would target the poorest without the indignity of means-testing and would provide security and dignity in old age.

Mr. Frank Field: Perhaps I should begin with a confession, Mr. Deputy Speaker, because before I came to the Chamber I received a message that my bleeper was awaiting me in the Whips Office. I am a non-possessor of a bleeper, but am soon to be a possessor. This will be the last social security debate in which I participate without one.

Mr. Deputy Speaker: Order. I hope that the right hon. Gentleman will remember the rules when he has the bleeper and will not bring it into the Chamber.

Mr. Field: I was about to say, Mr. Deputy Speaker, that, if you heard a bleeper earlier, it was not mine. Should I become off message during this debate, it will be unintentional, but I will not be able to plead that in future.
Clearly, there are two parts to our debate today. The hon. Member for Northavon (Mr. Webb) made that distinction. The first is our concern about what is happening to existing pensioners and the major future reforms that the Government are attempting. My only difference with the motion and the Government amendment is that they have both been less than generous about what the Government have achieved and what the Secretary of State intends to achieve by the end of this Parliament. The changes that the hon. Gentleman so quickly dismissed, such as value added tax on fuel, the winter fuel payments and the reintroduction of free eye tests as well as the commitment—if not yet the reality—to concessionary travel for pensioners, are very welcome to pensioners I meet in Birkenhead. I confess that those pensioners differ greatly from the hon. Gentleman's description of pensioners in Northavon. Birkenhead pensioners are pretty tough and cynical about what politicians say. They study carefully the difference between rhetoric and reality. I do not know whether that means that they should spend their holidays in the west country and pick up the trait that he described, but I would not concern myself with the worries that he had on that score.
Labour Members can be proud of the Government's record so far. Clearly, it would not be a record on which we would want to go into an election—my right hon. Friend the Secretary of State clearly would not want to do so either. In trying to improve on that record, he will have the support of Labour Back Benchers and a considerable amount of support from other parts of the House.
I shall touch on the longer-term reforms, which naturally centre on the Government's proposals outlined in the Green Paper. I shall set out my worries about the reforms as they are beginning to take shape.
The Government say, rightly, that the document is a Green Paper, which shows that they are listening and willing to learn. In addition, it gives hon. Members the chance publicly—there are, thank goodness, many chances privately—to influence the debate.
My first concern is my major one: having read the Green Paper and listened to Ministers, I do not yet believe that they understand the people to whom they—or, they hope, somebody—will try to sell pensions. We are talking about those who comprise the third poorest group in our society. Life has not given them the opportunities and chances that would have enabled them to have portfolios or financial advisers or to become accustomed to practices with which some, if not all, Members of Parliament are acquainted. They will be asking, what is the Green Paper all about? Given the difficulty that we have with saying in a couple of sentences what it is about, question marks must hang over whether we have got the reform right. If we cannot explain it in terms simple enough to grip those who fall outside current pensions provision and enable them to understand what we are trying to do, it may be that the key objective of simplicity is still beyond our grasp.
My first worry about the proposals arises from all the talk about different sorts of pensions provision, for I do not believe that that should be our first step on what we hope will be the great journey of pensions reform. Linked to that is the statement made today by my right hon. Friend the Secretary of State, that everyone has different requirements; and the statement he made on the radio this morning, that all of us needed financial advice. I dispute that. We do not need advice about sending children to school; we think that such things should just happen. If we had a simple single pension provision for the first tier, there would be no need for financial advice, for the requirement would be that everyone should be a member of that scheme. The costs would certainly be different, for there would be no costs relating to financial advice; and there would be no reason for people saying that they could not understand why they should be members, so it would be a much easier scheme to enforce.
Linked to that are the two hands of the Government—the left hand and the right. My right hon. Friend the Secretary of State is right to say that he is proud to be introducing a minimum pension guarantee to help existing pensioners, but I worry about how that minimum pension guarantee will operate in the long term. I lack my right hon. Friend's confidence that, somehow, people will box that guarantee off in their mind, decide that it does not relate to them, and resolve to go ahead with saving in response to the Government's call to save more. I do not believe that they will ignore the fact that, if they are among the poorest third of members of our society, they might be only slightly, and certainly not much, better off if they save than if they do not. If they listen to today's debate or a recording of it, especially the speech made by the hon. Member for Northavon, they will begin to doubt whether, by saving, they can make themselves much better off.
We are at a watershed. Increasing numbers of pensioners must be telling their grandchildren their deep regret that they are decent people: that they saved, that they did not fiddle and that they became and remained members of their occupational pension scheme even though it would not make them much better off, only to find that they are substantially worse off than other people who did not save, whether or not they could have done so.
Without extending compulsion in the way that hon. Members on both sides of the House have argued we should, defending the minimum pension guarantee will become more difficult as the years go by. We are sending a powerful message to people whom we shall not compel, but whom we hope to persuade, or merely entice, to make provision for their pensions—we used to call it bribery when we were in opposition and the House discussed national insurance rebates to encourage people to take out private or stakeholder provision—when we know perfectly well that any financial adviser currently advising a third of the electorate should tell them that the worst thing for their financial health that they could possibly do is save. There is a deep sickness in our society when such a statement is true.

Mr. Patrick McLoughlin: The right hon. Gentleman is talking a lot of sense, and many people outside the House will support what he says. Does he accept that people who have saved become increasingly resentful of those who get looked after, even though they have made no provision whatsoever? That resentment will cause some serious problems unless what the right hon. Gentleman says is taken on board.

Mr. Field: I have heard that the Government will look at the disregards, and we know how cheaply that may be done—the sum mentioned is regularly lost in the accounts. If the accounts were out by only £25 million, the Comptroller and Auditor General would throw his hat in the air for the first time and say that he could sign them without qualifying them.

Mr. Malcolm Wicks: The other day, a constituent asked me two questions. Her first was, "How can anyone think that I can live on £80 a week?" Her second was, "Why did I bother to save for my pension, when all it has done is prevent me from getting income support?" I think that that is what my right hon. Friend is telling the House. Does he agree that no decent social policy has ever been built on the means test?

Mr. Howard Flight: Hear, hear.

Mr. Field: Indeed, and my hon. Friend used to make the same point in opposition. I do not want to disturb or upset his constituent, but all hon. Members will know that people—good neighbours—come to our surgeries to make sure that the frailer and more elderly person who lives next door gets all the help available. However, those good people are not themselves eligible for income support and the passports and discover—they are good enough thank goodness for it—that their neighbour is on a higher income than they are. That is a problem that the Government inherited, and I am sure that no Labour Member would want to defend the situation for much longer.
The other matters about which I wish to speak stem from the Green Paper. As they stand, the proposals present a real danger to occupational pensions. I was pleased with one of the sentences in the Green Paper, which said that occupational pensions were one of the greatest social security successes this century, if not the greatest. However, the proposal is to encourage employers

to set up stakeholder schemes. My worry is that employers will decide to do so and close entry into existing occupational schemes for new workers.
That is beginning to happen anyway. I hope that the Government, in their proper listening mode, will consider the proposals that have been made suggesting that the first tier of all pension provision, including occupational pensions, will be stakeholder provision. The effect would be that occupational schemes would continue to provide, not merely the minimum provision, but so much more as well.
My next worry about the proposals is that, having heard so much about stakeholder pensions and what they will achieve, we now find that there will be a considerable variety in such provision. I am not concerned that the next scandal will have to do with mis-selling, but that there will be a problem of churning. By that I mean that, once stakeholder pensions are introduced, people who have heard so many good things about what such pensions will achieve will believe that they should be in those schemes rather than in their current schemes. That may be true but, given the age of the people who might make that decision, the likelihood is that it will turn out not to be. Therefore, the problem facing us in the next Parliament will not be one of mis-selling but of churning.

Mr. Duncan Smith: I do not want to make a point that is parti pris, but does the right hon. Gentleman agree that part of the problem is that, in the Green Paper, the Government set out to introduce a stakeholder pension that is simple to administer and cheap and easy to understand? That is the basic element all the proposals must have if they are to succeed. Now, the Government have come up with the additional idea about paying for advice, and there may be other ideas to come. Does that not run counter to the initial premise, and will it not cause people to wonder whether they are doing the right thing? Is it not possible that, in years to come, people will say, "Why did I take out that investment?"

Mr. Field: The hon. Gentleman is being slightly unfair to the Government. The Secretary of State made it clear that today's proposals are aimed at people on middle and high incomes. However, there has never been any difficulty in getting such people to save. The real problem is to set up a redistributive scheme that the poor can join. The aim is to ensure that poor people will be free of means-tested assistance—not merely for a year, but for all their lives.
My final point has to do with annuities. Most hon. Members will understand that the European central bank is committed to a policy that will keep inflation below 2 per cent. That policy means that, for the indefinite future, annuity rates will continue to fall. It is hoped that they will hit bottom at some stage. The result will be that many people who have saved, in the belief that their savings would provide them with an adequate pension in retirement, will be deeply disappointed. I hope that the Government will devote some new thinking to the question of what sort of bond provision should be introduced to offer pensioners an alternative to buying annuities.
I do not accept that pensioners do not understand their finances. They seem to be a lot better at it than I am at understanding mine. The Secretary of State said that


annuities are sometimes tax-free vehicles, but he went on to say that a pension probably will turn out to be a more important investment than a home. Yet a home is also bought with some tax-free concessions, and we do not get too exercised about what people should do with those. We do not decide that people must, at a certain date, trade in their homes because they may misbehave with those assets. It is time to make a big jump and to reconsider the way in which people are forced to trade their pension capital for annuities, something that substantially disfavours them for the rest of their lives.
In my speech, I wanted to make two points. First, I wanted to congratulate the Government on the moves that they have made for existing pensioners. The Government are backed by a huge majority of hon. Members wanting that record to be improved by the next election. My guess is that the Government are pushing at an open door to such an extent that, at the next election, Conservative Members—for opportune reasons if not for good ones—will support further reforms introduced by the Government to improve pensioners' living standards.
The second element of my contribution has to do with long-term reforms. I am very grateful that the Government have published the Green Paper, and that they want to listen and to learn.

Mr. Peter Viggers: So far, no hon. Member has declared an interest. I am a member of the—rather bad—parliamentary pension scheme. I am fortunate to have some modest provision of my own, and am also the chairman of a pension fund.
The 1997 Labour election manifesto stated that a Labour Government would
lay the foundations for a modern welfare state in pensions and community care.
That was clearly regarded as very important ground on which to fight the campaign, as the party chose to execute what I consider to be the dirtiest trick in recent electoral history. As The Daily Telegraph reported on 26 April 1997, the previous day, the present Chancellor of the Exchequer had said:
it was a known and admitted fact that the Conservative plan is to abolish the state pension".
The same report stated:
Although looking distinctly uncomfortable and visibly irritated, Mr. Blair, flanked by Gordon Brown, the shadow Chancellor, refused to condemn such tactics. Instead he defended the party's decision to attack the Government's plans.
That was a scurrilous and disgraceful incident in recent politics.
In fact, the Conservative plan was quite different. The scheme called basic pension plus proposed by my right hon. Friend the Member for Hitchin and Harpenden (Mr. Lilley), who at that time represented St. Albans and was Secretary of State for Social Security, was a carefully considered framework for ensuring long-term pension efficiency. However, the Labour tactic certainly worked: canvassing revealed that many elderly pensioners were deeply worried that their pensions were to be scrapped. That was really awful.
Under current pension provision, those in private sector schemes are well funded and well cared for. UK pension funds contain £800 billion in pension assets, which is equivalent to 77 per cent. of gross domestic product, and is the same as the amount reserved in pension assets for the whole of the rest of Europe. It compares with 7 per cent. of GDP in France and 14 per cent. in Germany.
However, the benefits are thinly shared. According to a NatWest study, only one in five of the people currently working is heading for comfortable retirement. Half are heading for financial difficulties, and one in three will be essentially dependent on the state. That is based on the definition of an income of £180 a week as comfortable, rather than the £70-plus that is the current pension. The amounts required to fund that level of provision are considerable. If the normal pension multiplier of 16 is applied to the extra £100 a week, or £5,000 a year, some £80,000 is needed to provide £180 a week.
What principles should we use to approach the problem? I have quoted the noble and formidable Lady Castle before, and I find myself in strong agreement with her once again. In a booklet entitled "We can afford the Welfare State", co-written with Professor Peter Townsend, she set out three basic principles which I should like to endorse. Those principles should have underlined the Government's commitment to pensions. The booklet says:
If we want to encourage people to move from welfare to work, we must reduce the area of means-testing, not increase it.
I agree with that. Secondly, the booklet says:
We must resurrect the state basic pension as the foundation of security in old age for everyone.
There were sound reasons why the Conservatives broke the link between pensions and earnings, but the process has gone too far. We must resurrect the state pension.
The third principle is unattractive, but unavoidable. The booklet states:
It should be compulsory for everyone to contribute to an adequate second pension.

Mr. Sutcliffe: I should not miss the opportunity to find out whether the policies that the hon. Gentleman is advancing are shared by his colleagues on the Conservative Front Bench. I think not.

Mr. Viggers: The hon. Gentleman will have to ask my hon. Friends. He might read last Thursday's speech by my hon. Friend the Member for Grantham and Stamford (Mr. Davies), who will wind up for the official Opposition. I heard that speech, and thought it so fine that I handwrote a note to my hon. Friend to congratulate him on it. I look forward very much to hearing him again if he happens to catch your eye tonight, Mr. Deputy Speaker.
Compulsion is unavoidable, for reasons that have been discussed by several hon. Members, including the hon. Member for Northavon (Mr. Webb). The anomaly is that people who save will be worse off. If there is no compulsion, people will not save. Compulsion is essential.
The Secretary of State said that he had been involved in pension planning both in his present post and in his previous one at the Treasury. However, many informed journalists believe that a turf war between the Treasury and the Department of Social Security lies at the heart


of the mess over pensions in which the Government find themselves. In the words of the Prime Minister, the DSS is tasked to
deliver significant savings over the longer term
from the social security budget. Clearly, the Department is not finding that possible.
Introducing a minimum pension guarantee—a rebranding of income support—which is indexed to wages will inevitably increase the gap between that guarantee and the state retirement pension. Means testing is being institutionalised. The single person's guarantee of £75 a week, and the couple's guarantee of £116.60, will be available only to those who have savings of less than £8,000. Anyone who has more will not be eligible for the minimum pension guarantee, or for housing benefit of £40 a week and council tax benefit of perhaps £10 a week.
The hon. Member for Northavon made the same calculation that I made on how much would be required to provide a pension of £50 a week, or £2,500 a year. Applying the pension fund multiplier of 16, some £40,000 would be required. Anyone who cannot save £40,000 need not bother; they would be wasting their time, and their money.
It is extraordinary that the present Chancellor of the Exchequer declared in 1993:
I want the next Labour Government to achieve what in 50 years of the welfare state has never been achieved. The end of the means test for our elderly people.
What he has achieved is exactly the opposite, and there will be widespread resentment throughout the country as people who saved and provided for their futures realise that others who live in the same road and who made no provision are better off than they are.
The effect on the taxpayer is also significant. According to answers to my parliamentary questions, means-tested benefits cost an average of 7 per cent. to administer, while universal benefits cost 2.5 per cent. The basic state pension costs only 45p a week to administer, while income support costs £5.45. Means tests bring disadvantages of costs as well as of resentment.
The Government's other big pensions activity was their raid on pension funds when they abolished the advance corporation tax dividend tax credit. That amounted to £3.9 billion this year, and will amount to £5.4 billion in a full year. It will reduce future benefit by up to 10 per cent. It will also impose further costs—local authorities must fund the extra pension required by their employees, and that has been calculated to mean council tax rising by 12p in some areas.
Labour's 1997 manifesto pledge to
support and strengthen the framework for occupational pensions
is not being met. Instead, there is a substantial increase in means testing, and in envy and bitterness. There are greater costs to the taxpayer. The Labour party is failing to fulfil its promise.

Mr. Gerry Sutcliffe: We should start by remembering why we are here. This is an Opposition debate on pensions, so where are the massed ranks of Conservatives who want to tell us how badly they feel? It is good to see sinners repent, as my right hon. Friend the Member for Birkenhead (Mr. Field) has reminded me.
I am happy to follow the hon. Member for Northavon (Mr. Webb) because I respect his concrete contribution to discussions on pensions.

Mr. Viggers: I am grateful to the hon. Gentleman for allowing me to intervene so early in his speech. I shall tell him why the Conservative Benches are rather depleted: a huge Conservative rally has, most unfortunately, happened to coincide with the debate.

Mr. Sutcliffe: The mind boggles. What passes for a huge Conservative rally these days? We shall wait with bated breath for that rally to tell us something about Conservative policy, particularly on pensions.
The debate is about the Opposition trying to embarrass the Government on pensions. However, the only people who should be embarrassed about their pensions policy are members of the Conservative party. It is as though, on 1 May 1997, they drew a line under what had happened before then. They take no responsibility for what the previous Government did.
I am happy to be able to speak today as I have been unable to do so recently because of the protocol surrounding Parliamentary Private Secretaries. Pensions are vital to the people of the United Kingdom. The debate's focus has been narrowed to the detail of pensions, rather than the big picture. The Secretary of State has rightly pointed out that that big picture is important to Labour.
As the hon. Member for Northavon reminded us, pensioners need not be patronised. They know what happened under the previous Government. They know who tried to introduce value added tax at 17 per cent. on energy—the Conservative party. They know who broke the link between earnings and pensions—the Conservative party. They know who deserted the health service and created health inequality among pensioners—the Conservative party. Therefore, we will take no lessons today from the Opposition about missed opportunities on pension policy.
Occupational pensions play an important part in the way forward. The Green Paper sets out opportunities; but the previous Government missed opportunities when the Labour party tabled amendments to the Pensions Act 1995 to improve protection for workers, for member trustees and for pensioner board members to enable them to join occupational pension schemes—all dismissed by the Conservative Government.
If the Opposition are to learn any lessons, they must tell us why they did not improve the situation for British pensioners, and why British pension provision fell to the lowest level in the EC.

Miss Julie Kirkbride: The Labour party is now in government. If the hon. Gentleman believes what he is saying so strongly, why do not the Labour Government restore the link with earnings for the basic pension? It is very simple.

Mr. Sutcliffe: We will cover such issues as we proceed with the debate.
Because of the nature of today's debate, it is important that we set the scene and judge the Government's pension record. We cannot do that without examining what went before. A group of pensioners visited the House yesterday


on a trip organised by Age Concern and they said to me, "You're not doing badly for 20 months, given that the other lot had 18 years." I accept that we must be modest and not raise expectations, as the Liberal Democrats say, but pensioners will not be patronised. They know what has happened to their incomes and to the society in which they live, and it is right that the Government should look to the big picture.
The Government inherited a complete mess on welfare reform and social security. The budget was running out of control and there was no direction. [Interruption.] If one studies social security matters in detail, one knows how the budget is divided up and that pensions account for a big part of that.
A measure of society is how it treats its older people, how they fit into society and how they feel about themselves. Therefore, all aspects of Government policy should relate to the pension framework. As well as pension provision, we need an improved health service. We have to create an economic environment where pension value remains constant. We must create a situation in which people who have worked hard all their lives have the opportunity for a decent retirement. The Opposition should learn to choose debates on subjects on which people outside share some of their concerns. They do not share their concerns when it comes to developing pension policy.
I was interested to hear my right hon. Friend the Member for Birkenhead. He knows the work that went into the pension review and how the former Minister of State, Department of Social Security, our hon. Friend the Member for Southampton, Itchen (Mr. Denham), listened to people throughout the country on pensions. He listened to voluntary groups, pensioners, and people such as Jack Jones and Barbara Castle—people with a view on pensions—and we have set down a particular route. I know that there are concerns about the long term, but, in the short term, we have been successful in trying to alleviate some of the problems faced by pensioners.
I made available an extra £21 billion for the winter fuel payment. It is hard for Labour Members to listen to Opposition Members carping about such measures, because we know that they have a real effect on people's lives. [Interruption.] The hon. Member for Bromsgrove (Miss Kirkbride) may mock, but such measures are important to people out there. We must remember that we represent real people. The Chamber is not simply for political point-scoring; it is for governing the country and governing with consent. If we had a poll now to discover in whose hands pensions would be safest, I am sure that people would agree that they would be safest in the Labour party's hands, not the Opposition's.

Miss Kirkbride: Only because the Government have a built-in majority.

Mr. Sutcliffe: We have a majority because people trust us on pensions.

Mr. Deputy Speaker: Order. We cannot have exchanges from a sedentary position. The hon. Member for Bromsgrove (Miss Kirkbride) knows that, if she wants to intervene, she must do so formally.

Mr. Sutcliffe: Yes, we accept that we are in government, and we fully accept that it is our

responsibility now to develop policies on pension and welfare reform. To administer benefits, including pensions, we need an active modern service, and we certainly did not have that under the previous Government.
I can talk from first-hand experience of the demoralisation among staff in social security departments, many of whom were on temporary contracts and did not know their long-term future, and many of whom had to claim benefits themselves. When people went to social security offices to ask about benefits, including pensions, they were not given advice and support on the appropriate benefit. If they applied for the wrong benefit, the staff were not allowed to tell them what benefit they should go for, and they were asked to leave. That was the result of a straitjacket of Treasury-driven cuts under the Conservative Government. It had nothing to do with principle or developing pension policy. That was the support that the previous Government gave pensioners.
Pensions are complicated and we need to ensure that pensioners receive their proper entitlement. That is why I am proud that the Labour Government instituted a scheme to ensure that, in nine project areas, pensioners had the opportunity to know their entitlement. We tried to ensure that there was discussion between local authorities and the Government so that claim forms were easy to complete and individuals were advised on their benefit entitlements. That was a positive step to try to ensure that the millions of people who were not claiming the income support to which they were entitled did so.
The Government, through the minimum income guarantee, are trying to change our approach to pensions. It is right and proper, as has been pointed out, that we should change the culture of pension provision in Britain. Ours is an argument based on principle. Those who can work should have the opportunity to do so, and those who cannot should be looked after. We are telling those who can save and who can provide for the future that they must do so, but most ordinary people with such an opportunity will take it. They will be encouraged by the annual statement from their pension provider, no matter what sector is involved. That annual statement will tell them where they are in terms of their pension provision. That is a massive step towards people acknowledging what they have to do for the future.
We have heard no mention today from Opposition Members about the poorest pensioners. They never mentioned poverty or the position of carers and people with disability. They should apologise for their lack of compassion to such people, to many of whom society owes a great debt for the hours of support and care that they give.
We can have a reasoned debate on pensions, and it is right that we should, but that cannot take place in the atmosphere that we have this afternoon of an Opposition day debate. No Opposition Front-Bench spokesman is present, and not even a handful of Conservative Members—

Dr. George Turner: On a point of order, Mr. Deputy Speaker. As a new Member, I am surprised that it is in order that those who have tabled an Opposition motion are not even present on the Front Bench. Is it in order for that to continue?

Mr. Deputy Speaker: The hon. Gentleman has been here long enough to realise in his heart of hearts that that


is not a point of order. It is entirely up to individual Members whether they present themselves in the Chamber or in any Committee of the House.

Mr. Edward Leigh: Further to that point of order, Mr. Deputy Speaker.

Mr. Deputy Speaker: It was not a point of order.

Mr. Sutcliffe: We do not want the debate to descend too low, but the Opposition's intention is clear.
It is important that pensioners in my constituency and across the country know where the pensions debate is going. The hon. Member for Gosport (Mr. Viggers) spoke about the need to restore the link between pensions and earnings and to re-examine pension provision, but we heard nothing from the other Conservatives Members whose party had 18 years in which to put right a problem that we tackled as soon as we came to power.
We could see the pensions disaster ahead, and we knew that we needed to be honest with people. That is our strength. The Government are committed to honest debate about pension provision and the difficult decisions that people have to face. We acknowledge that there are sections of society that need support and protection. I understand that pensioners just above the income support level are concerned that they have saved whereas others might not have, but I want us to create a society in which, as my right hon. Friend the Member for Birkenhead says, the community is considered as a whole. The Government have polices to deal with people who might deliberately not save or who might avoid work, but I should prefer there to be a decent standard of living for all and a minimum income level below which people should not fall.
With the introduction of the national minimum wage, and of better employment conditions through the fairness-at-work proposals, we are creating a society that looks after the individual, a society in which people who can do well are enabled to do so but in which those who fall through the gap, through no fault of their own, are looked after.
The Green Paper and the speech of my right hon. Friend the Secretary of State show the difference between the two main parties. We are committed to listening, seeing what can be done and being straight about what the long-term worries will be instead of just trying to score cheap political points in a half-day Opposition debate.

Mr. Howard Flight: I must first declare an interest as I am the chairman of a company that manages pension funds.
Getting pension policy right for everyone is crucial for an advanced society like ours. Getting it right means that people can have a decent standard of living in their latter years, but it is also of great economic importance. It is unfair not to recognise as a major achievement of the past 20 years the fact that we built up £800 billion of private sector funding and that some 85 per cent. of people who retired did so with an occupational or personal pension at the age of 65.
In most of continental Europe, the economies are out of balance because of a lack of private funding; and, because of high add-on employment taxes, 20 million

people are priced out of work. At the other end of the scale, Japan has the problem of excessive personal saving because of inadequate pension provisioning, in both the private and state sector. That has resulted in individuals saving too much for fear of retiring in poverty. Economically speaking, getting the system and the balance right is extremely important.
It is rather glib for Labour Members to brush off the importance of the advance corporation tax attack on pension funds. In my personal election address in 1997, I warned my constituents, many of whom were approaching pension age, of the risk of that ACT recovery attack on pension funds, and I believe that it is no accident that my constituency produced one of the largest Conservative majorities in the country. To dress up the proposal to reduce pension fund accumulation by some £5 billion a year and to say that it is justified by tax reform is, frankly, to mislead people. The accumulation of reserves out of which to pay pensions in future is crucial.
The increased costs of funding have not yet worked their way through the system, but, in the company sector, they will lead to a substantial move away from defined benefit final salary schemes to defined contribution money purchase schemes. No new defined benefit schemes are coming through now, and, from within the industry, I see many companies looking to move to money purchase schemes in order to control their costs. At the end of the day, such schemes will provide smaller pensions for the great majority in the middle.
I suspect that it will not be popular among those on the Labour Benches if I say that the Government's handling of pension mis-selling has been unwise. I do not deny that there was a huge difficulty, but, as others have said, the main problem has been the success in bringing down inflation over recent years, the fall in gilt yields and the resulting virtual doubling of the cost of annuities. It is fine to say that the annuity one buys will hold its value better, but when one retires at 65, much of the money purchase provisioning ends up buying a great deal less than people reasonably expected 15 years ago, whereas company occupational schemes have improved and their members have benefited at the expense of members of money purchase schemes.
There has been a major improvement in the standards of financial advice in the United Kingdom in this decade, largely as a result of the Financial Services Act 1986. In a sense, that improvement is being undone and negated by the message being sent by the Government.
There has historically been pension mis-selling in the state sector. I have had substantial correspondence with women who worked for the state in the 1960s, 1970s and even the 1980s who feel that they were talked into cashing in their pension rights for a capital sum and that the Government's response was simply that advice in a magazine at that time was sufficient. However, that was 20 years ago and standards were different.
More recently, two or three constituents have written to me about Department of Social Security projected pension arrangements which omitted to include the fact that the state earnings-related pension for widows is to halved with effect from April 2000. They complained that even the DSS did not advise them of the correct situation and they had not made adequate provision.
Ten years ago, people running occupational pensions schemes frequently behaved badly. They did not give fair transfer values or advise those leaving a company of the


potential value of their deferred pension, and the transfer payments made were often ludicrously low. I well remember that, particularly people under 30, could not wait to get out of their occupational scheme. They wanted their own portable pension scheme and, even though circumstances and the lack of sound advice at the time have caused problems for many, the personal pension movement of the past 15 years has been a major benefit for many. Hundreds of thousands of people have pensions beyond the state provisioning, which they would have otherwise not have had.
It might be utopian, but I believe that it would be wonderful if there were cross-party agreement on this subject. It does not help if the system keeps changing all the time. People need a straightforward framework that they know and can trust. Although the Government say that they took many soundings before publishing the Green Paper, I, and most of the people whom I know in the industry, believe that there is a certain quick-fix approach to it. It focuses on a particular aspect that I admit needed focusing on, but the Government have not thought about the knock-on effects or other relevant aspects.
I do not know whether LISA was dreamed up by the Treasury with the knowledge of the Department of Social Security. However, it appears that it is not in tandem with the main thrust of the proposals contained in the Green Paper.
It has correctly been made clear that the Government have focused on the major issue of what should be the decent minimum income in old age, and on the fact that, over the next 50 years, much more than at present, people are heading to be dependent upon income support. If anything, the number of people earning less than £20,000 a year without funded pensions is growing, not reducing.
My criticism of the Government's proposals is that the thinking behind them amounts substantially to determining the cheapest and slightly quick-fix way of addressing the problem. As has been said, there is the major problem of disincentive to work and save. In particular, it is felt by some that they will do better by not participating in the scheme.
The second big issue involves the self-employed, who represent a huge area of lack of personal provisioning. Indeed, there is no incentive for the self-employed. They cannot become members of the revised scheme and they have little incentive to participate in a LISA.
The final objection, which has not yet been brought out, is that there are major threats to the bottom half of the middle of society. There is a great risk that many companies will embrace the new stakeholder schemes and that collective personal pension schemes will have to be given up. For many who belong to occupational schemes where the company contributes, there is a dangerous incentive to use a stakeholder scheme and not to contribute to other than top-hat schemes.
Given that everything is moving towards more and more money purchase, we must address the issue of whether to buy annuities, and the requirement to buy them at 75. There are many schemes for the self-employed which involve buying an annuity upon retirement. As we have heard, many people are now being forced to buy an annuity at potentially the wrong time. We need to have new rules and a reconsideration of the draw-down

arrangements. As others have argued, we need more imaginative ways to deploy pension assets once the pension is to be drawn.
In short, I suggest that the Green Paper has not addressed the large and important territory of related issues. Instead, it has focused on the narrow issue of how to deal with the employed part of lower-income earners. LISA is not really an answer to the self-employed pension problem, which is lack of provision. I fear that the Government have presented rather drawing-room-like proposals that will not be understood by the man in the street. They are too complicated and there is urgent need for major simplification of the pension world which, as a result of the Revenue's obsession with avoidance, has become a labyrinth and triffid of complicated tax rules that no one understands.
There is a need for much greater reform and a much closer look at pensions. It would be wonderful if there could be cross-party agreement. Many good things have come up, but I trust that the Government will note that there have been quite a few criticisms from the pension fund industry. I hope that the Government mean what they say in terms of the document being a Green Paper and that they will take account of the many comments that are being made and have regard to the areas that will need to be addressed.

Miss Geraldine Smith: My constituency has a higher-than-average proportion of pensioners included in the population. This is so because many retired people, having lived and worked all their lives in industrial towns and cities, like the prospect of living out their retirement in a seaside location that is in close proximity to the lake district.
The available of all types of housing at relatively low prices provides them with an incentive to take the plunge and move into the area. The net result is, as I have previously stated, that the area has a disproportionate number of elderly people. That being the case, I am sure that the debate will be followed with a great deal of interest by many of my constituents.
As the large concentration of pensioners within my constituency contains sizeable elements of all social groups, it has provided me with the opportunity to see at first hand over many years the stark contrast between the quality of life enjoyed by those pensioners who have retired with a decent occupational or personal pension, and the misery and despair suffered by those condemned to exist on the basic state pension. While many of the better-off have rightly been able to enjoy the freedom that retirement has given them, for the poorest pensioners the golden years of retirement have turned into an eternal nightmare.
There is little doubt that the previous Tory Government's decision to break the link between earnings and pensions considerably swelled the ranks of pensioners living in poverty. The progressive devaluation of the basic state pension has dragged many hard-up pensioners into the welfare benefit system. That progressive slide into poverty, which has afflicted so many elderly people, has completely devastated their lives.
Many pensioners are confused about, or entirely unaware of, the benefits to which they are entitled. That is in no small way thanks to the insidious suggestions


constantly propagated by Opposition Members that anyone who receives a state benefit is a scrounger. Many impoverished pensioners who are aware of their entitlement to income support are too proud to apply for it. I therefore welcome the Government's decision to introduce guaranteed minimum levels for pensioners. I welcome also the Government's long-term commitment to increase guaranteed minimum levels in line with earnings, thereby ensuring that even the poorest pensioners share in the growing prosperity of our nation.
Clearly defined minimum income levels will provide a focal point for many pensioners who are unsure of their entitlements and will prove to be of great assistance to the Government in their efforts to ensure that all pensioners receive the income to which they are entitled. I welcome also other measures that the Government have taken, such as assistance with fuel bills, concessionary travel and free eye tests. Above all, I believe that the extra £21 billion investment in the national health service and the improvement in service standards that it will bring will be welcomed by people throughout the country, with the exception, perhaps, of some of those who sit on the Opposition Benches.
Radical proposals for the future of pensions are contained within the Green Paper. The first question that we must ask ourselves is whether the system really needs such reforms or whether we can tweak it to make it more responsive to the needs of our people. Within the current system, we have the basic state pension, which covers nearly all employees and the self-employed. We also have secondary pensions in the form of state earnings-related pension schemes, occupational schemes and personal schemes, which are compulsory for most employees. However, only the personal pension option is open to the self-employed, albeit on a voluntary basis. There are also numerous private schemes available to those who wish, or are able, to make additional pension provision above and beyond the compulsory pension level.
The system as it stands fails to provide adequate security in old age for many. It fails entirely those who earn less than the lower earnings limit of £3,300 a year. They are not even entitled to the basic state pension, let alone any form of secondary pension. They are therefore totally dependent on welfare benefits in old age. Other low earners who earn between £3,300 and £9,000 are also poorly served by the current system. The high administration costs and charges of private funded schemes make them an unattractive proposition for such people. Unless they are fortunate enough to belong to an occupational pension scheme, they will have to rely on state provision and will be left behind as the nation grows richer.
Even those in the middle income bracket are not adequately catered for by the current system. The ever-increasing flexibility required by the modern labour market and the growth of small and medium companies is leading to a downturn in occupational pension provision, and many people are left only with the options of SERPS, which is declining in value, or high-cost private schemes. The self-employed are probably worst served. A large proportion of them are on low to middle incomes. Their only option is a high-cost personal scheme to top up their basic state pension.
All in all, it is apparent that the current system is failing a huge number of people for a variety of reasons. It is equally apparent that radical reform is essential. The Government's plans for a low-cost, high-return stakeholder pension will provide a bridge between the state and private provision.
The granting of pension credits to carers, something that has already been mentioned, is an imaginative idea that at long last gives recognition and comfort to that often-forgotten legion who play such an important role. The assistance provided for low and middle earners to attain a decent second pension will also be welcomed by millions.
I am not at all surprised that the Conservative motion totally opposes the measures that the Government have already introduced and those proposed in the Green Paper. The concept of the fairer, socially just and inclusive society that the Government are determined to build, and of which these measures are an integral part, is just as abhorrent to Tory Members as was the concept of a welfare state to their predecessors before its introduction just after the war.

Miss Julie Kirkbride: I am delighted to follow the hon. Member for Morecambe and Lunesdale (Miss Smith), who made a somewhat emotional appeal on behalf of pensioners and their incomes. I am sure that her pensioner constituents will take great interest in what representations she makes to her Government to restore the link between the basic state pension and earnings, because she clearly implied they should do so. I look forward to her doing that.
The hon. Member for Bradford, South (Mr. Sutcliffe) made a similarly emotional appeal on behalf of pensioners and sought completely to rewrite history by suggesting that the previous Conservative Government did nothing about pensions. Labour Members often like to rewrite what happened under the previous Government, so I take this opportunity to remind the hon. Gentleman of that Government's enormous success. Some £800 billion is now invested in the private pensions industry and occupational pensions. Many of our citizens can look forward to their pension and their retirement with a great sense of certainty and security.
I remind Labour Members that that is a massive achievement because, when we introduced proposals for more private pension provision, they ran scare stories similar to the one that they ran about our reform of the basic state pension just before the last election. They said that we were trying to privatise pensions and abolish state pensions and that that was a terrible idea. Yet that was one of the greatest success stories of the previous Conservative Government.
Let us look to the future. In the United Kingdom, we can look forward to the national economy's balance sheet being such to enable us to afford pension provision. I readily agree that we might need to do more for poorer pensioners, but that balance sheet has been greatly helped by what happened during 18 years of Conservative Government. When we compare ourselves with our European Union counterparts, we realise that they will have great difficulty in being able to afford to meet the


demands of their growing aging population and the many people who will look to the state to pay their earnings-related pension contributions.

Mr. Field: The hon. Lady is telling us about the achievements of the previous Conservative Government, which clearly do not relate to occupational pensions, which have been developing for the whole of the century. The previous Government's initiative was personal pensions. Will she tell the House how many people are drawing personal pensions and by what amount?

Miss Kirkbride: I do not have that information to hand. I am sure that the right hon. Gentleman, having been a Minister, knows the figures much better than I do. I am trying to draw attention to the fact—with which I am sure he will agree—that the great impetus given to providing for oneself, whether by occupational or personal pension, has been an enormous success from which we shall all benefit, because it will be possible to afford the pensions of the growing elderly population of which we shall be a part in future. It is important that Labour Members recognise how important that impetus has been—they would clearly like to forget about it.
We take exception to what happened when Labour got into power. The Chancellor introduced changes to advance corporation tax which have greatly diminished the value of pensions not only for future but existing pensioners, who will find that their pensions will increase at a lower rate because their pension funds will not be as valuable as they would otherwise have been. Labour Members say that they made those changes because they enabled them to reduce the level of corporation tax. We welcome that reduction, but its success in affecting the amount that industry invests has yet to be shown, and there has been a massive reduction in the amount of corporate investment. That change has yet to bear any fruit. We still insist that it was an unwise move that will affect us all.
The changes to ACT have a bearing on the problem of poorer pensioners. They, by definition, do not pay income tax, and they are now placed in the wicked position of being unable to reclaim the tax on their dividend contributions. It is an absolute disgrace that a party whose Members have, in their most recent speeches, made an emotional appeal on behalf of pensioners does not to allow the poorest pensioners to claim back their tax, while others, including myself and, perhaps, my colleagues, are able to do so.

Dr. George Turner: Will the hon. Lady advise the House which tax people are or are not getting back and when it was paid?

Miss Kirkbride: I refer to the tax that has already been paid by a company through corporation tax, which is a tax on profits, and is then returned to the individual. I am sorry that the hon. Gentleman is so ignorant that he does not understand that, but I am happy to explain exactly to what poorer pensioners are entitled.
As the hon. Member for Northavon (Mr. Webb) pointed out in what was an excellent contribution, as always, 300,000 pensioners are in that position and 250,000 of

them will not be eligible for the minimum pension guarantee because they have too many savings. The minimum pension guarantee, which is typical of the Government's hype about their policies, affects very few people because the vast majority of those to whom it will apply already receive that money in one form or another, such as through income support. They are not that bothered whether the money is called a minimum pension guarantee or income support, but they need to know that it is on its way. The Government create policies and pretend that they have a huge impact when they clearly do not.
I reaffirm the points that have been made by several hon. Members about the difficulties of the Government's proposals to create an incentive to save. The operation of the state second pension alongside the basic state pension will mean that very poor people will be eligible for the minimum pension guarantee. As I understand it—the proposals are complicated—those who are earning between £3,000 and £9,000 a year will be eligible for the state second pension and will end up receiving pretty much the same amount as the minimum pension guarantee, which the Government propose will be 20 per cent. of real earnings. All those people will get the same, irrespective of their contribution.
Due to the Government's commitments, what will happen to those who will be earning £10,000 a year—just above the point at which they would be eligible for a state second pension? They will be encouraged to take out a stakeholder pension, yet they will be earning very little—less than £200 a week. They are very poorly paid once tax is deducted, yet they will have to save through a stakeholder pension—or any other vehicle that the Government suggest in their various weird and wonderful schemes, which we do not particularly understand.
Such people would have to earn, say, £41,000 a year to make up for state benefits. Indeed, they would need extra income because, if they are not eligible for income support, they are not eligible for passported benefits either. Therefore, such people will have to save a great deal of money if they are to be comfortable in their retirement. It is difficult to see how people on an income of about £10,000 can do what the Government, and we all, hope that they will do. The major and fundamental problem with the Government's proposal is that they are turning their face away from compulsion.
My hon. Friend the Member for Arundel and South Downs (Mr. Flight) knows much more about occupational pensions than I do, but I know that there are great fears that the system that the Government are introducing will undermine the occupational pension sector. That trend has already started, and it will get worse. There is a massive incentive for employers to introduce stakeholder pensions, to which the Government have not said that companies should contribute.

Mr. Leigh: My hon. Friend is making a good point about employers. A point has occurred to me about employees, which I am not sure that the Government have answered. There will be a rebate of national insurance contributions for those entering a stakeholder pension of 9.2 per cent., starting at £9,000 a year, falling to 4.6 per cent. Surely that will be a further incentive to take


out a stakeholder pension rather than stay in an occupational pension scheme. Perhaps my hon. Friend has the answer.

Miss Kirkbride: I would not be so bold as to offer an answer on the Government's proposals. I am sure that the Minister will be happy to answer my hon. Friend's relevant point.
The stakeholder pension will affect the very people whom the Government want to help. When looking at their balance sheets and considering how expensive it would be to maintain occupational pensions, employers will be encouraged to offer stakeholder pensions because there is no requirement on them to contribute to those pensions. As a result, very many people will find themselves in a worse position.
Due to the discrepancy in earnings power in a company, there might be another effect, which would be worse for Labour Members to contemplate. Lower-paid employees, including part-time employees, will be offered stakeholder pensions, but the cream at the top of the company will have pensions to which the company will contribute. Many high earners will expect a significant pensions contribution from their employer as part of their benefits package. Labour Members ought to consider whether they are setting up an apartheid regime in the pension system. [Interruption.] Labour Members scoff, but I am afraid that they are doing their constituents no service by not recognising the difficulties that could occur as a result of the Government's proposal. As time is a little short, I shall conclude on that point.

Kali Mountford: I had been in the House for a mere few weeks when we had a pensions debate, in which many Opposition Members concentrated on pension funds. Since many of them are pension fund managers, that was not surprising. I am, however, a little surprised that they have continued to confine the debate so narrowly and have not moved on in their thinking. I am also surprised to find that their attachment to private pension schemes has not altered, in spite of our experience of them. Someone asked earlier who is benefiting from private pension schemes. That is a conundrum; none of us knows. Nobody is yet receiving a pension or benefiting from such schemes, which have been operating for only 10 years, although a number of my constituents are having a great many problems as a result of mis-selling.
A very large company of financial advisers in my constituency told me of its problems due to pension mis-selling: it has to put the matter right—and quite right too. Why should pensioners bear the brunt of the problem? I admire the way in which the company is going about that task in training financial advisers. That should have happened in the first place. Conservative Members can offer no lessons in that regard.
The other thing that really upsets me about these debates is the concentration on a group of people who at least have the capacity to contribute to pension schemes—whether occupational, private or otherwise. The genuinely poorest people are those who are entitled to income support but do not claim it. I have made that point before, and make no apology for repeating it. The hon. Member for Bromsgrove (Miss Kirkbride) thinks that we become emotional about those matters, but that is not surprising.

She may argue that pensioners are made poor when, in receipt of private pensions, they encounter problems with anomalies in the system, but they are not the genuinely poorest people.
The Government have rightly introduced the minimum pension guarantee because we need to find a way in which to address the problem of the poorest pensioners. The genuinely poorest pensioners cannot wait until tomorrow for a new scheme. They have no opportunity to make any new contributions to a scheme. It is therefore right that we find a way in which to address that poverty. Connected to that task—I have said this to my right hon. Friend the Secretary of State and make no apology for repeating it—is the conundrum of the poverty trap. Being a listening Government, I think that they would want to avoid that. I will not accept from Conservative Members that the poverty trap became apparent just today. We inherited that problem, and must find a solution to it.
The problem of passported benefits, which is not confined to pensions, affects people who live just above the poverty line. It is right that the Government should consider the disregard. The Conservative party took away the benefit tapering system, so it is a little absurd for Opposition Members to tell us that they are concerned about the poverty trap. They did little about it in government. Indeed, they took away at least one of the supports that dealt with the problem.
Of course some pensioners who have saved for their old age feel resentful when they find that their neighbours, who through no fault of their own were unable to save, receive income support and the benefits that accrue from it. But, that is no reason not to introduce a minimum pension guarantee. Let us remind ourselves what that means. It means an increase three times higher than could have been expected and a guaranteed income.

Mr. Rendel: Will the hon. Lady give way?

Kali Mountford: I am sorry, but time is preciously short. I am upset that I am having to speak so fast in the first place.
We must listen to people if we are to improve benefit take-up. Let us take cognizance of the fact that 28 pilot schemes are finding out what older people themselves think should be the answer. Why do people not rush to fill in their benefit claim forms? What are the possible solutions? How can a community pull together to support older people?
In this debate, we have heard details of the other measures in the support package, such as those relating to eye tests and health care. They are worth mentioning. However, we need to find a way to ensure that pensioners access the whole range of benefits and services available to them, and we must do something about the stigma attached to benefits such as income support, so that pensioners are willing to accept those benefits. Members of the Opposition are trying to denigrate the Government for having made a vital move in that direction; but the Government should be congratulated.
The second state pension is a masterstroke. I cannot understand why Opposition Members object to it. As those Members seem to have difficulty understanding the concept, I commend to them page 41 of the Green Paper, "Partnership in Pensions", which contains a graph which specifically shows how much easier it will be for


pensioners in future to have their guaranteed pension as of right. That takes away all the stigma and the problem of take-up that we have had for many years. When, at Prime Minister's Question Time this afternoon, I heard the word "redistribution", I thought about that graph, because it specifically shows how money will be redistributed to the poorest pensioners, who need it most.
The hon. Member for Northavon (Mr. Webb) made much of what he believes will be the problem of the future. We have a listening Government, and the hon. Gentleman has made his point well. I am sure that the Government do not want the poverty trap to continue. I believe that there are solutions to that problem, and I am sure that the Government will study them, but that is no reason not to have the second state pension. That option would open up a range of pensions to people who have previously been completely excluded—such people are so rarely mentioned by some hon. Members. They include women who are divorced, carers and people who are on low pay—perhaps in part-time jobs—or who have been in and out of work over a period.
The hon. Member for Arundel and South Downs (Mr. Flight) mentioned self-employed people, as though those people's needs were not addressed in the Green Paper. That simply is not true. Their needs are addressed by the second state pension or by the stakeholder pension. It is not true that a self-employed person cannot get a stakeholder pension. I refer hon. Members to page 50 of the Green Paper, where an example of such a pension is given. It seems to me that Conservative Members have come to the House, rather belatedly, to rally around pensions instead of rallying around their hon. Friends at their Tory rally. They have not even read the document, such is their commitment to pensions.

Mr. Eric Pickles: Hon. Members are probably having more fun at the rally.

Kali Mountford: It seems that the hon. Member for Grundy wants to make an intervention from a sedentary position, but I shall resist comment, as time is short.
On pensioners, the Government inherited a downward spiral, and that spiral had to be arrested. The way to do that was by considering today's poorest pensioners. It is right to remove taxation anomalies from the system. It is right to provide a wide range of services for pensioners today. It is right to study the changes in demography and accept that, in future, there will be fewer people in employment as a proportion of the population, and that we must find a way to fund pensions for tomorrow.
When they were in government, Conservative Members accepted that we would run into that problem. It surprises me that, when an ideal solution is presented to them, they cannot see what is under their nose.

Mr. Edward Leigh: Despite the Government's good intentions, we now have a very confusing mixture of public and private provision in pensions—a mixture of personal pensions, occupational pensions, the basic state pension, the second pension and the stakeholder pension. I believe that there will be real confusion among people about how best to plan for retirement.
We should continue, on a cross-party basis, to seek solutions that have been tried abroad—although not necessarily by South American economies, which might be less developed than our own, or by city-state economies such as Singapore, which may have altogether fewer problems of an aging population.
In the five minutes that I am allowed, I shall cite the example of Australia. Australia is a highly developed economy, very similar to ours. Interestingly, it went through much the same stages as did our economy between 1900 and 1983. In 1900, it had the highest per capita gross domestic product in the world. By 1980, it had fallen to 14th place, and it had adopted many of the Keynesian solutions of nationalisation and of subsidies to manufacturers that our Governments had adopted.
Such was the state of the Australian economy, especially regarding pensions, that the then Treasurer, Paul Keating, announced that something had to be done radically to reform pensions. He said:
We must let Australians know, truthfully, honestly, earnestly, just what sort of international hole Australia is in. If this Government cannot get a sensible economic policy, then Australia is basically done for. We will end up just being a third-rate economy. Then you are gone; you are a banana republic.
The left-of-centre Labour Government of Australia—I am making this speech because I hope that the Government are considering what is happening in Australia—decided something very radical indeed, far more radical than the measures that the Government are introducing. They went down the route that was suggested to them by the right hon. Member for Birkenhead (Mr. Field), but they went further. In 1986, under Mr. Paul Keating, they devised an innovative retirement system, based primarily on mandatory private savings in plans called superannuation funds.
All workers in Australia—this was done in consultation with trade unions—were required to put 3 per cent. of their earnings into those mandatory private funds. That figure will increase to 9 per cent. by 2002, when the system will be fully implemented. In 2002, all workers in Australia will be required to set aside 9 per cent. of their income in a superannuation fund of their choice; that is the underlying principle. A series of options will be open to them. The market will be highly regulated, to ensure that there is no mis-selling, but the worker is required to put the money into a fund of his choice.
I believe that compulsion is essential. I do not believe that one can have a voluntary system at the same time as a high safety net. We all want a high safety net; that is the reason for the minimum income guarantee. We do not want to allow pensioners to fall into poverty. It may not be their fault that they have not built up an adequate pension—take the example of a woman who has been divorced, who has worked hard all her life bringing up her family.
We want a high safety net, but if one has a high safety net—I know that that is why the Government are taking this route—and a voluntary system of contributions, inevitably, as my hon. Friend said, one ends up with a tremendous disincentive to save. Therefore, one must have a compulsory scheme, such as the one that the Australians have developed.

Mr. Field: Will the hon. Gentleman cast his mind back to the day, a couple of months ago, when I introduced a Bill to require compulsory stakeholder savings? The one hon. Member who stood up to oppose it was himself.

Mr. Leigh: The right hon. Gentleman knows full well why I did that. I was trying to tease out his hon. Friends to support his Bill, and hardly anyone came along. He well knows that. The right hon. Gentleman was going around—he had a complete headache—saying, "Please do not force a Division, because no one in the Government will support me." So let us not have any of that. The right hon. Gentleman knows perfectly well what we were doing then. However, I salute him. He was right to try to remind the Government of what they should try to achieve.
The Australian system has achieved more income for retirees. In future, average-waged workers should be able to retire with two or three times the income that they would have had under the original Government-run scheme. The new system has also resulted in increased national savings. The overall savings rate could climb by more than 3 per cent. of gross domestic product.
If that scheme in Australia is so good, and if it was introduced by a left-of-centre Government, why have not we heard more from our Government as to why they are not introducing it here? Why have they rejected the plans suggested by the right hon. Member for Birkenhead?
There is one difficulty with such a scheme—the Australian Government are moving down the road of means-testing to pay for it. Is it possible to introduce such a radical reform without an element of means-testing? The Government must think seriously about that.
I ask both sides of the House to co-operate in radical reform to try to prise our nation out of a culture of dependency and to increase responsibility, and to do so by means of a compulsory savings system, gradually brought in with a measure of bipartisan support. That is increasingly being tried around the world. It works, it is successful and it is the road that we should go down.

Mr. Quentin Davies: I must deal with one important matter before I say anything else. The Government's proposals involve doubling the rate of accrual for entitlement to state second pension over the rate of accrual that applies under the SERPS system, from 20 to 40 per cent. of eligible earnings. In response to an intervention from me this afternoon, the Secretary of State denied that, on the subsequent band of earnings, from £9,000 to £18,500, the rate of accrual would be halved.
I refer the House to page 45 of the Green Paper, which I have read several times. Paragraph 3 states:
The rate on the band of earnings £9,000 to £18,500 a year would be 10 per cent."—
as opposed to 20 per cent. at the present time, so that has been halved.
As I said earlier, I am sure that the Secretary of State did not intend wilfully to deceive the House, but he was close to doing so, if I may say so.

Mr. Darling: The hon. Gentleman is one of the most good-natured Members of the House. It would be unfortunate if he suggested that I did anything other than answer what I understood him to say, which was that people earning between £9,000 and £18,500 would have half the rate of accruals. The point that I was making, which is common ground between us, is that, on the portion of those people's income before £9,000, they, too, get the double rate. Of course it is tapered out to £18,500.

It would be nonsense to have a double accrual rate all the way up the scale. The table on page 41 of the Green Paper makes that clear.
I want to make it clear that I responded to what I understood the hon. Gentleman to say, both today and in the article in the recent pensions magazine. There is common ground between us. There is double the rate of accrual up to £9,000, then it is tapered out to £18,500 in an entirely sensible way.

Mr. Davies: Of course I accept the good faith of the right hon. Gentleman in his last remarks. Hansard will bear out the point that I made in the intervention, that, when the Government make announcements to the House, it is right that they should present both sides of any equation—they should give the good news but not conceal the bad news. I said that it was not enough to say that the rate of accrual below £9,000 would be doubled, and to leave out the material fact that the rate of accrual from £9,000 to £18,500 would be halved.

Dr. George Turner: rose—

Mr. Davies: No, I cannot give way, as our time is limited. I apologise to the hon. Gentleman. As the House knows, I rather like giving way in such debates, and I wish that there were more time. Last Thursday, we were not running up against a time limit, but we are today.
I want to say something about some of the contributions to this interesting debate. I apologise in advance for the fact that I do not have time to deal with all of them—interesting contributions were made by members of all three parties. I single out my hon. Friend the Member for Bromsgrove (Miss Kirkbride) and thank her for a spirited and effective defence of the previous Government, which has the advantage that I do not have to say anything on that subject myself, as she said it so well for me.
My hon. Friend the Member for Gosport (Mr. Viggers), who knows a great deal about the subject, as does my hon. Friend the Member for Arundel and South Downs (Mr. Flight), presented a calculation that should make us all think carefully. If somebody saves £40,000 for a pension, he loses the whole amount. He does nothing other than generate a level of income equivalent to the means-tested benefits that he would have received if he had had no money or pension over and above the basic state pension. That is the dead-weight cost of saving.
Unfortunately, I think that my hon. Friend miscalculated that—he was too generous to the Government. It is important to realise that the means-tested benefits are indexed to the index of prices, and prospectively the minimum income guarantee even indexed to earnings. If one takes an annuity rate that is indexed to prices, one comes up at present with an annuity rate of just over 5 per cent., or under 5 per cent. if widows' benefits are offered.
On that basis, to generate an income of £4,000 in retirement, the sum of £80,000 would be required. It would be pathetic to imagine someone on a modest income setting aside £1,000 a year for 40 years, after expenses. With a total reasonable investment gain of about 3 per cent. compound, he might end up with £80,000, and it would all be a waste of effort—he would be cheated by the new Labour Government.
My hon. Friend the Member for Arundel and South Downs pointed out a crucial aspect of the present scene—the decline of the traditional salary-related, defined benefits scheme. My hon. Friend the Member for Gainsborough (Mr. Leigh) spoke tellingly of the Australian experience.
The right hon. Member for Birkenhead (Mr. Field) spoke extremely well, as he always does in these debates. He, too, expressed his fears about the future of occupational pensions in the light of the Government's proposals, and made some telling points on means-testing.
The hon. Member for Northavon (Mr. Webb) effectively devastated the Government's propaganda about the £140 a year additional earnings to pensioners as a result of their measures. He brought it down to a few pence a week. The House should be grateful to him for that cogent analysis.
It was obvious from the beginning of the debate that the Secretary of State was embarrassed about the subject. He did not come to the House full of pride, trying to sell the Government's proposals. He began with a complete red herring—the basic pension plus. He tried to put the argument back historically to the position several years ago. If he had any pride in the Government's own record or proposals, he presumably would have found an opportunity over the past six weeks to debate those proposals, but we had to wait for the Conservative Opposition to table the motion in order to get a debate on the Government's record.
That record is disgraceful. There is no other word for it. The Government were elected on a manifesto that contained three pension pledges—first, to preserve SERPS; secondly, to set up a citizenship pension for carers and the disabled; and thirdly, to set up a stakeholder pension.
The first promise has been explicitly broken in the Green Paper. SERPS is to go. The second promise has been covertly buried. We have heard no more about citizenship pensions. Nothing in the document offers carers or the disabled anything better than the means-tested—[Interruption.] Oh yes, I have read it. If the Minister of State wishes, we can have a debate on that, and I will demonstrate that those people are no better off under the Government's proposals than they would have been under the current means-tested arrangements.
As to stakeholder pensions, what a monumental shambles. For 15 months, the right hon. Member for Birkenhead and the right hon. Member for Camberwell and Peckham (Ms Harman) worked away on some scheme that was then rejected, and they were both sacked for their pains. So we did not get the original Green Paper when we were promised it last summer. Then, for six months, the Secretary of State and his team worked away on something else. We had the usual press spin and press leaks. We were told that they were working on compulsion and on something for the self-employed. Nothing emerged for the self-employed, and nothing emerged on compulsion.
It is clear that the Government had been vacillating and dithering about compulsion right up to the 11th hour, 59th minute and 59th second. Page 105 of the

document—this will show that I have read it, although of course the Government will wish that I had not—refers to
compulsory funded pensions for those earning over £9,000 a year".
They changed the policy even after the document had been sent to the printers. It does not get much more shambolic than that—especially in view of the fact that the Government had 18 months to think about it.
The fact is that the Government's proposals are a complete and utter mess. What is more, the Treasury believes that they are a mess because it produced its own document this afternoon. Is the timing significant? I think it is, because the Opposition's debate was scheduled for this afternoon. The Treasury document is another shambles. In 11 years in the House of Commons, I have never seen a Government produce a document like this. They did not even send it to the printer—I suppose because they were afraid that they might have to change it at the last minute. This piece of rubbish was produced on a do-it-yourself brochure-making machine in some office somewhere. The document falls apart in your hands if you read it two or three times—which is more times than anyone would want to read this particular rubbish.
The document is rubbish because it does absolutely nothing to increase the total pension provision in this country. In fact, it has the potential to damage profoundly some very good pension schemes. Employers will have to wind up their group personal pension schemes and replace them with stakeholder schemes because the document says that the group pension will not qualify as a stakeholder pension. The vast majority of group personal pensions involve employer contributions, but there is no obligation for employers to contribute to stakeholder pensions. Therefore, employers may wind up schemes involving employer contributions and replace them with Government stakeholder pensions, which require no contributions on their part. People will be much worse off.
The Government have not considered the administrative burden for employers. How are those who employ one, two or three people supposed to cope with the administrative burden associated with establishing the schemes? The Government have not dealt with the issue of people who move jobs. Who will look after their interests? Who will send the annual report to those who have moved? Perhaps that will be done by the employer several times removed from the current one. None of those things has been thought through.
As my hon. Friend the Member for Chingford and Woodford Green (Mr. Duncan Smith) said this afternoon, we now have a plethora of proposals, including not only stakeholder pensions, group personal pensions and existing personal pensions but the Treasury's LISA proposals. It is obvious that everyone will have to seek advice about whether and at what point they should opt out of the new state second pension and what to opt into or whether—this is the vital point upon which the House should focus—they should save at all. Each time they introduce a new means-testing proposal, the Government make the situation worse. There has been one such proposal a month since the autumn, when I found myself on the Front Bench.
Every time that means-testing is extended, the Government raise the income threshold below which it is not sensible for people to save because they will simply deprive themselves of thousands of pounds of means-tested benefits. Even when the return begins to be


positive, it will be pathetically low. People would be better off spending the money and enjoying it rather than saving, at great sacrifice, for absolutely nothing or at slightly higher levels for a derisory and miserable sum in retirement. The fact is that the Government must focus on reality. The reality is that, if you go on means-testing in the way you are, you will do irreparable damage to saving in this country and you will put yourself in a position—

Mr. Deputy Speaker (Mr. Michael Lord): Order. The hon. Gentleman must use the correct parliamentary language.

Mr. Davies: I am using the word "you" in the impersonal sense. If you prefer, Mr. Deputy Speaker, I could use the third person impersonal and say "one". However, I find it more natural to use "you" in the impersonal sense.
Means-testing will irreparably damage savings. The majority of people on or below average incomes—I think that average earnings are £15,000 to £18,000—will have to consider carefully whether they should save in those circumstances. If the Government desire people to save, they will have only two choices: the first technique is compulsion, which they have rightly rejected—and we reject also—and the second is to bamboozle those on modest earnings to save modest amounts. That is the exercise in which the Government have engaged so disgracefully this afternoon—and that is an exercise that we reject.

The Minister of State, Department of Social Security (Mr. Stephen Timms): The whole House will have enjoyed this speech by the hon. Member for Grantham and Stamford (Mr. Davies). It was a bravura performance delivered with the verve and gusto that we associate with the hon. Gentleman and that we all enjoy—but that might also be described kindly as displaying a light grasp of the details of the Government's proposals.
I first became aware of the hon. Gentleman's light grasp of the details when he and I were interviewed separately on Radio Newcastle about the problems with the NIRS2 computer system, which have affected many pensioners around the country. Many hon. Members will not have had the opportunity to hear the interview that the hon. Gentleman gave, but it certainly merits a wider audience. The contract for the computer system was signed by the previous Government in 1995, with a view to the system being up and running by February 1997. Therefore, I was intrigued to hear the hon. Gentleman tell the presenter on Radio Newcastle on 10 December last year:
Oh, no, no, no … this contract was signed in the autumn of this year, more than a year after the last election.
The presenter gently pointed out to the hon. Gentleman that it was the Conservatives who had brought in the contractor, to which he responded:
This is quite absurd. If the Government are saying this then they really, absolutely plumbed the depths … This is the most sensational view—this is the most extraordinary dereliction of responsibility on their part".
The presenter made one more half-hearted attempt to point out the facts, to which the hon. Gentleman replied:
No, no, no, no, no.

The correct answer was "Yes"—but that in no way detracted from our enjoyment of the hon. Gentleman's spirited contribution on that occasion, or on this.
It is also true that the hon. Gentleman's cavalier disregard for the Government's actual proposals in no way detracted from our enjoyment of the hon. Gentleman's swashbuckling denunciation of them this afternoon. However, it is important to refer to what is really in the Green Paper. I refer the hon. Gentleman to the clear statement on page 42 of that document regarding carers. The position of carers is greatly enhanced by our proposal regarding the state second pension. Our proposals pose no threat to group personal pensions and nothing undermines them. A proper collectively run scheme may be more attractive to many people, but nothing in our proposals undermines what is currently possible under personal pension arrangements.

Mr. Duncan Smith: The Minister started his speech by having a little fun about the NIRS2 computer system. Perhaps he would like to explain to pensioners why, back in September, the Secretary of State said that the problems would be sorted out in two weeks, why nothing else was heard from him until January, and why, last week, the Minister said that it will be many months before the difficulties are resolved. Regardless of how the problems occurred, should he not have done people a favour and eased their worries by telling them what was going on?

Mr. Timms: We have been absolutely frank about what has been happening throughout this process. We have been picking up the pieces and sorting out the problems that we inherited from the previous Government. I wish to comment about another issue that was picked up frequently in the debate.

Mr. Leigh: This Government keep blaming the previous Government. Has the Minister read the National Audit Office report, published in May 1997, which says that the procurement was "well managed"—they are its words. It also says that the shortlisting process was well managed to produce three credible bidders. The problems have originated since this Government were elected.

Mr. Timms: No, no. [Interruption.] I have read the report. The fact is that the system of commission had to be operational by February 1997, but parts of it are becoming operational only now. We have had to sort out the mess.
I want to comment on an issue that a number of hon. Members have mentioned, and of which the hon. Member for Grantham and Stamford makes much—means-testing. The state second pension will be a 100 per cent. contributory scheme. The whole point of what we are proposing is to ensure that—unlike the position that we inherited from the previous Government, where people could work and pay contributions throughout their working lives and still retire directly on to means-tested income support—the state second pension means that everybody in such a position retires with a pension above the minimum income guarantee level, which will itself be uprated over time, in line with earnings.
This is an imaginative, effective and affordable programme, which is why it has been so widely welcomed in the pensions industry and elsewhere. There is, of course, a pension policy that would generate


means-testing on a massive scale—basic pension plus. I was intrigued that the hon. Member for Gosport (Mr. Viggers) tentatively expressed some support for that policy, but we do not know whether it is still the official policy of the Conservative party. We have not been informed of that this afternoon, and it would be helpful if we could be told.
If the Opposition are arguing that the least well-off should not share in rising prosperity, and that the minimum income guarantee should not be uprated over time in line with earnings, let them say so. That is not the view of Labour Members, nor is it the view among pensioners.
We have had an interesting debate and a number of thoughtful contributions were made. The hon. Member for Northavon (Mr. Webb) made some interesting points on the future of the basic state pension, and I am grateful to him for drawing attention to the review of saving limits for the minimum income guarantee. I agree that that is the right thing to do. Winter fuel payments have been popular among pensioners and I certainly support them, as do the great majority of people.
My right hon. Friend the Member for Birkenhead (Mr. Field) made a thoughtful and constructive speech. He told us that it would be his last off-message speech; I am not sure what he meant by that. I want to comment on a couple of points that he made. He will agree that the effect of our proposals will be to reduce the number of people who would end up on means-tested benefit when they retire and so reduce the problem, which he highlighted, of people feeling that it is not worth saving.
I agree with my right hon. Friend that we need to strengthen the arrangements for occupational pensions and the Green Paper, and the subsequent consultative paper, contain important proposals to achieve that. On the question of churn, which he raised, the Financial Services Authority is aware of the problem and will be introducing proposals to address it.
My hon. Friend the Member for Bradford, South (Mr. Sutcliffe) did the House a great service by reminding hon. Members of the record of the previous Government. He also elicited a helpful explanation of why so few Conservative Members were present during the debate. Apparently they were at a Conservative party rally. For quite a long time, there were more Liberal Democrat Members than Conservative Back Benchers in the Chamber, even though the Conservatives initiated the debate. Indeed, at one time, no Conservative Front Bencher was present.
My hon. Friend the Member for Morecambe and Lunesdale (Miss Smith) made some telling points about the position of many pensioners. She was absolutely right to welcome the proposed link with earnings for the minimum income guarantee and right to spotlight the problem facing self-employed people, which stakeholder pensions address.
I am grateful to my hon. Friend the Member for Colne Valley (Kali Mountford) for highlighting the work that is being done in the pilot schemes to encourage people to take up the minimum income guarantee and to draw attention to the benefits of stakeholder pensions for the self-employed.
Let me conclude by summarising our proposals. The position we have inherited is that we are heading for a situation where, in 50 years, one in three people retiring will go straight on to income support. Today's pensioners are too often without security. As a result of the pensions mis-selling scandal presided over by the previous Government, people do not trust the system and too few people who could afford a funded pension do not have one.

Mr. Quentin Davies: A few moments ago, the Minister said that it was not true, as I had contended, that group personal pensions would not qualify as stakeholder pensions. I refer him to page 53 of his document and paragraph 29, which states:
Existing personal pensions will not therefore be able to describe themselves as stakeholder pension schemes.
That appears clearly in the document. If there is confusion, it is the fault of the Minister's document.

Mr. Timms: No. What the document says is absolutely right. Of course group personal pensions will not qualify as stakeholder pensions; they are personal pensions—they are different. I repeat the point that I have made to the hon. Gentleman: nothing in the document will make it any more difficult to provide a group personal pension than it is today.
Our proposals in the Green Paper are based on the principle that those who can afford to save should do so, but that those who cannot afford to save should also be able to look forward to security in retirement. It rests on three key proposals: the minimum income guarantee, the state second pension and a new system of funded stakeholder pension schemes.
The first element is the minimum income guarantee: £75 per week for a single pensioner from April, which will be available to all those who meet the conditions for entitlement to income support. It will be increased every year, and our long-term aim is that it should rise in line with earnings so that even the least-well-off pensioners will be able to share the benefits of rising national prosperity. It is fundamental to those proposals that the benefits should be enjoyed by the many and not just the few.
We announced in the Green Paper that we will consider how we can relax the savings limit and consider the possibility of introducing an income disregard. We want to encourage saving and ensure that there is not a penalty against pensioners for saving. We will introduce measures to achieve that.
Looking forward, under the policies that we inherited, we would have been heading for a position where many people would retire on to a pension that would leave them—

Miss Kirkbride: Will the Minister give way?

Mr. Timms: I cannot. Time is running short and I apologise to the hon. Lady.
People who have worked and paid contributions throughout their working lives would go straight on to income support. That would be the case for people earning less than £15,000 a year even if they had been in the state earnings-related pension scheme throughout their working lives. How can we instead ensure that people who have


paid and contributed throughout their working lives can be assured of a retirement income above the minimum income guarantee level, outside means testing?
We want to reduce dependence on means-tested benefit in retirement. That is the objective we have set ourselves, and I believe that the whole House will share it. Some people have suggested that the way to achieve that is to restore the link between the basic state pension and earnings rather than prices. That would be an immensely expensive measure, but a large group of people—those earning, throughout their lives, between the lower earnings level and about £6,000 per year—would retire directly on to income support, unless they had made their own provision. Despite the huge expense, it would not achieve what we want.
What about increasing compulsion? The hon. Member for Gainsborough (Mr. Leigh) talked about that. At the moment, there is a significant degree of compulsion, and people are required to contribute 4.6 per cent. of their pay into SERPS or a contracted-out scheme. If we doubled that figure to 9 per cent., people earning less than £9,000 a year would still retire on to the minimum income guarantee level.
Restoring the earnings link would not work. Increasing compulsion would not work. We need what might be called a third way—the state second pension to replace SERPS. That is what we have proposed, and it will achieve the objective that we have set. The first two pillars of our proposal are the minimum income guarantee and the state second pension. The third pillar—the key pillar—is stakeholder pension schemes, which will be secure, low cost and flexible.
We also want to encourage the development of occupational schemes which, as has been said a number of times in the debate, are one of the great welfare success stories of this century. We want to encourage people to join an occupational scheme, if they are able to do so, and to boost confidence in good schemes through a quality in pensions accreditation programme.
We want to achieve regulatory simplification and, in a parallel exercise to the Green Paper, we have issued a consultation document on our proposals. In a very simple, powerful innovation, we have proposed that every pension scheme member should receive a combined pension forecast every year which tells them exactly where they stand.
Our proposals represent a redrawing of the contract for pensions between the state, the private sector and the individual. Those who can save for their retirement have the responsibility to do so, and the state must provide effective security for those who cannot. That is the principle on which our reforms are built and I take pride in commending them to the House.

Question put, That the original words stand part of the Question:—

The House divided: Ayes 185, Noes 327.

Division No. 54]
[7 pm


AYES


Ainsworth, Peter (E Surrey)
Baker, Norman


Allan, Richard
Baldry, Tony


Amess, David
Ballard, Jackie


Ancram, Rt Hon Michael
Beggs, Roy


Arbuthnot, Rt Hon James
Beith, Rt Hon A J


Atkinson, Peter (Hexham)
Bercow, John





Beresford, Sir Paul
Jack, Rt Hon Michael


Blunt, Crispin
Jackson, Robert (Wantage)


Boswell, Tim
Jenkin, Bemard


Bottomley, Peter (Worthing W)
Jones, Ieuan Wyn (Ynys Môn)


Bottomley, Rt Hon Mrs Virginia
Jones, Nigel (Cheltenham)


Brady, Graham
Keetch, Paul


Brake, Tom
Kennedy, Charles (Ross Skye)


Brooke, Rt Hon Peter
Key, Robert


Browning, Mrs Angela
King, Rt Hon Tom (Bridgwater)


Bruce, Ian (S Dorset)
Kirkbride, Miss Julie


Bumett, John
Kirkwood, Archy


Burns, Simon
Lait, Mrs Jacqui


Burstow, Paul
Lansley, Andrew


Butterfill, John
Leigh, Edward


Cable, Dr Vincent
Letwin, Oliver


Cash, William
Lewis, Dr Julian (New Forest E)


Chapman, Sir Sydney (Chipping Barnet)
Lidington, David



Lilley, Rt Hon Peter


Chidgey, David
Livsey, Richard


Chope, Christopher
Lloyd, Rt Hon Sir Peter (Fareham)


Clappison, James
Loughton, Tim


Clark, Rt Hon Alan (Kensington)
MacGregor, Rt Hon John


Clark, Dr Michael (Rayleigh)
McIntosh, Miss Anne


Clarke, Rt Hon Kenneth (Rushcliffe)
MacKay, Rt Hon Andrew



Maclean, Rt Hon David


Clifton-Brown, Geoffrey
Maclennan, Rt Hon Robert


Collins, Tim
McLoughlin, Patrick


Colvin, Michael
Major, Rt Hon John


Cotter, Brian
Malins, Humfrey


Cran, James
Maples, John


Curry, Rt Hon David
Mates, Michael


Davey, Edward (Kingston)
Maude, Rt Hon Francis


Davies, Quentin (Grantham)
Mawhinney, Rt Hon Sir Brian


Davis, Rt Hon David (Haltemprice)
May, Mrs Theresa


Donaldson, Jeffrey
Moss, Malcolm


Dorrell, Rt Hon Stephen
Nicholls, Patrick


Duncan, Alan
Norman, Archie


Duncan Smith, Iain
Oaten, Mark


Emery, Rt Hon Sir Peter
Öpik, Lembit


Evans, Nigel
Ottaway, Richard


Faber, David
Page, Richard


Fabricant, Michael
Paice, James


Fallon, Michael
Paterson, Owen


Feam, Ronnie
Pickles, Eric


Flight, Howard
Prior, David


Forsythe, Clifford
Randall, John


Foster, Don (Bath)
Redwood, Rt Hon John


Fowler, Rt Hon Sir Norman
Rendel, David


Fox, Dr Liam
Robathan, Andrew


Fraser, Christopher
Robertson, Laurence (Tewk'b'ry)


Gale, Roger
Roe, Mrs Marion (Broxbourne)


Garnier, Edward
Ross, William (E Lond'y)


Gibb, Nick
Ruffley, David


Gillan, Mrs Cheryl
Russell, Bob (Colchester)


Goodlad, Rt Hon Sir Alastair
St Aubyn, Nick


Gorman, Mrs Teresa
Sanders, Adrian


Gorrie, Donald
Sayeed, Jonathan


Gray, James
Shephard, Rt Hon Mrs Gillian


Greenway, John
Shepherd, Richard


Grieve, Dominic
Simpson, Keith (Mid-Norfolk)


Gummer, Rt Hon John
Smyth, Rev Martin (Belfast S)


Hague, Rt Hon William
Soames, Nicholas


Hamilton, Rt Hon Sir Archie
Spelman, Mrs Caroline


Hammond, Philip
Spicer, Sir Michael


Hancock, Mike
Spring, Richard


Harris, Dr Evan
Stanley, Rt Hon Sir John


Harvey, Nick
Steen, Anthony


Hawkins, Nick
Streeter, Gary


Heald, Oliver
Stunell, Andrew


Heath, David (Somerton & Frome)
Swayne, Desmond


Heath, Rt Hon Sir Edward
Syms, Robert


Heathcoat-Amory, Rt Hon David
Tapsell, Sir Peter


Horam, John
Taylor, John M (Solihull)


Howard, Rt Hon Michael
Taylor, Matthew (Truro)


Hughes, Simon (Southwark N)
Taylor, Sir Teddy


Hunter, Andrew
Thompson, William






Tonge, Dr Jenny
Whitney, Sir Raymond


Townend, John
Whittingdale, John


Tredinnick, David
Widdecombe, Rt Hon Miss Ann


Trend, Michael
Wigley, Rt Hon Dafydd


Trimble, Rt Hon David
Wilkinson, John


Tyler, Paul
Willetts, David


Tyrie, Andrew
Willis, Phil


Viggers, Peter
Wilshire, David


Walter, Robert
Yeo, Tim



Young, Rt Hon Sir George


Wardle, Charles



Waterson, Nigel
Tellers for the Ayes:


Webb, Steve
Sir David Madel and


Wells, Bowen
Mr. Stephen Day.




NOES


Adams, Mrs Irene (Paisley N)
Clelland, David


Ainger, Nick
Clwyd, Ann


Ainsworth, Robert (Cov'try NE)
Coaker, Vernon


Allen, Graham
Coffey, Ms Ann


Anderson, Donald (Swansea E)
Cohen, Harry


Armstrong, Ms Hilary
Coleman, Iain


Ashton, Joe
Colman, Tony


Atherton, Ms Candy
Connarty, Michael


Atkins, Charlotte
Cooper, Yvette


Austin, John
Corbett, Robin


Barnes, Harry
Corbyn, Jeremy


Barron, Kevin
Corston, Ms Jean


Bayley, Hugh
Cousins, Jim


Beard, Nigel
Cranston, Ross


Beckett, Rt Hon Mrs Margaret
Cryer, Mrs Ann (Keighley)


Begg, Miss Anne
Cryer, John (Hornchurch)


Benn, Rt Hon Tony
Cummings, John


Bennett, Andrew F
Cunliffe, Lawrence


Benton, Joe
Cunningham, Jim (Cov'try S)


Bermingham, Gerald
Curtis-Thomas, Mrs Claire


Berry, Roger
Dalyell, Tam


Best, Harold
Darling, Rt Hon Alistair


Blair, Rt Hon Tony
Darvill, Keith


Blears, Ms Hazel
Davey, Valerie (Bristol W)


Blizzard, Bob
Davies, Rt Hon Denzil (Llanelli)


Blunkett, Rt Hon David
Davies, Geraint (Croydon C)


Boateng, Paul
Dawson, Hilton


Borrow, David
Dean, Mrs Janet


Bradley, Keith (Withington)
Denham, John


Bradley, Peter (The Wrekin)
Dismore, Andrew


Bradshaw, Ben
Dobbin, Jim


Brinton, Mrs Helen
Dobson, Rt Hon Frank


Brown, Rt Hon Gordon (Dunfermline E)
Donohoe, Brian H



Doran, Frank


Brown, Russell (Dumfries)
Drew, David


Browne, Desmond
Drown, Ms Julia


Buck, Ms Karen
Dunwoody, Mrs Gwyneth


Burden, Richard
Eagle, Angela (Wallasey)


Burgon, Colin
Eagle, Maria (L'pool Garston)


Butler, Mrs Christine
Efford, Clive


Byers, Rt Hon Stephen
Ellman, Mrs Louise


Caborn, Richard
Etherington, Bill


Campbell, Alan (Tynemouth)
Ewing, Mrs Margaret


Campbell, Mrs Anne (C'bridge)
Fatchett, Derek


Campbell, Ronnie (Blyth V)
Field, Rt Hon Frank


Campbell-Savours, Dale
Fitzpatrick, Jim


Canavan, Dennis
Fitzsimons, Loma


Caplin, Ivor
Flint, Caroline


Casale, Roger
Flynn, Paul


Cawsey, Ian
Follett, Barbara


Chapman, Ben (Wirral S)
Foster, Michael Jabez (Hastings)


Chisholm, Malcolm
Foster, Michael J (Worcester)


Church, Ms Judith
Foulkes, George


Clapham, Michael
Fyfe, Maria


Clark, Rt Hon Dr David (S Shields)
Galloway, George


Clark, Dr Lynda (Edinburgh Pentlands)
Gardiner, Barry



George, Bruce (Walsall S)


Clark, Paul (Gillingham)
Gerrard, Neil


Clarke, Charles (Norwich S)
Gibson, Dr Ian


Clarke, Tony (Northampton S)
Gilroy, Mrs Linda





Godman, Dr Norman A
Macdonald, Calum


Godsiff, Roger
McDonnell, John


Goggins, Paul
McGuire, Mrs Anne


Gordon, Mrs Eileen
McIsaac, Shona


Griffiths, Jane (Reading E)
McKenna, Mrs Rosemary


Griffiths, Nigel (Edinburgh S)
Mackinlay, Andrew


Griffiths, Win (Bridgend)
McNulty, Tony


Grocott, Bruce
MacShane, Denis


Grogan, John
Mactaggart, Fiona


Gunnell, John
McWalter, Tony


Hain, Peter
McWilliam, John


Hanson, David
Mahon, Mrs Alice


Harman, Rt Hon Ms Harriet
Mallaber, Judy


Heal, Mrs Sylvia
Mandelson, Rt Hon Peter


Healey, John
Marsden, Paul (Shrewsbury)


Henderson, Ivan (Harwich)
Marshall, David (Shettleston)


Hepburn, Stephen
Marshall, Jim (Leicester S)


Heppell, John
Marshall-Andrews, Robert


Hesford, Stephen
Martlew, Eric


Hill, Keith
Maxton, John


Hinchliffe, David
Meale, Alan


Hoey, Kate
Merron, Gillian


Home Robertson, John
Michael, Alun


Hoon, Geoffrey
Michie, Bill (Shef'ld Heeley)


Hope, Phil
Milburn, Alan


Hopkins, Kelvin
Miller, Andrew


Howarth, George (Knowsley N)
Moffatt, Laura


Howells, Dr Kim
Moonie, Dr Lewis


Hoyle, Lindsay
Moran, Ms Margaret


Hughes, Ms Beverley (Stretford)
Morley, Elliot


Hughes, Kevin (Doncaster N)
Morris, Ms Estelle (B'ham Yardley)


Humble, Mrs Joan
Mountford, Kali


Hurst, Alan
Mudie, George


Hutton, John
Mullin, Chris


Iddon, Dr Brian
Murphy, Denis (Wansbeck)


Illsley, Eric
Murphy, Jim (Eastwood)


Jackson, Ms Glenda (Hampstead)
Naysmith, Dr Doug


Jamieson, David
Norris, Dan


Jenkins, Brian
O'Brien, Mike (N Warks)


Johnson, Alan (Hull W & Hessle)
O'Hara, Eddie


Johnson, Miss Melanie (Welwyn Hatfield)
Osborne, Ms Sandra



Palmer, Dr Nick


Jones, Barry (Alyn & Deeside)
Pearson, Ian


Jones, Helen (Warrington N)
Pendry, Tom


Jones, Ms Jenny (Wolverh'ton SW)
Pickthall, Colin



Pike, Peter L


Jones, Jon Owen (Cardiff C)
Plaskitt, James


Jones, Dr Lynne (Selly Oak)
Pollard, Kerry


Kaufman, Rt Hon Gerald
Pound, Stephen


Keen, Alan (Feltham & Heston)
Powell, Sir Raymond


Keen, Ann (Brentford & Isleworth)
Prentice, Ms Bridget (Lewisham E)


Kemp, Fraser
Prentice, Gordon (Pendle)


Kennedy, Jane (Wavertree)
Primarolo, Dawn


Khabra, Piara S
Prosser, Gwyn


Kidney, David
Purchase, Ken


Kilfoyle, Peter
Quinn, Lawrie


King, Andy (Rugby & Kenilworth)
Radice, Giles


King, Ms Oona (Bethnal Green)
Rammell, Bill


Kingham, Ms Tess
Rapson, Syd


Kumar, Dr Ashok
Raynsford, Nick


Ladyman, Dr Stephen
Reed, Andrew (Loughborough)


Lawrence, Ms Jackie
Reid, Rt Hon Dr John (Hamilton N)


Laxton, Bob
Robinson, Geoffrey (Cov'try NW)


Lepper, David
Roche, Mrs Barbara



Leslie, Christopher
Rooker, Jeff


Levitt, Tom
Rooney, Terry


Lewis, Ivan (Bury S)
Ross, Ernie (Dundee W)


Linton, Martin
Rowlands, Ted


Livingstone, Ken
Ruddock, Ms Joan


Lloyd, Tony (Manchester C)
Russell, Ms Christine (Chester)


Lock, David
Ryan, Ms Joan


Love, Andrew
Salter, Martin


McAllion, John
Savidge, Malcolm


McAvoy, Thomas
Sawford, Phil


McCabe, Steve
Shaw, Jonathan


McDonagh, Siobhain
Sheerman, Barry






Sheldon, Rt Hon Robert
Thomas, Gareth R (Harrow W)


Shipley, Ms Debra
Timms, Stephen


Simpson, Alan (Nottingham S)
Tipping, Paddy


Singh, Marsha
Touhig, Don


Skinner, Dennis
Trickett, Jon


Smith, Rt Hon Andrew (Oxford E)
Turner, Dennis (Wolverh'ton SE)


Smith, Angela (Basildon)
Turner, Dr Desmond (Kemptown)


Smith, Rt Hon Chris (Islington S)
Turner, Dr George (NW Norfolk)


Smith, Miss Geraldine (Morecambe & Lunesdale)
Twigg, Derek (Halton)



Vaz, Keith


Smith, Jacqui (Redditch)
Vis, Dr Rudi


Smith, Llew (Blaenau Gwent)
Walley, Ms Joan


Snape, Peter
Ward, Ms Claire


Soley, Clive
Wareing, Robert N


Southworth, Ms Helen
Watts, David


Spellar, John
Welsh, Andrew


Starkey, Dr Phyllis
White, Brian


Steinberg, Gerry
Whitehead, Dr Alan


Stevenson, George
Wicks, Malcolm


Stewart, Ian (Eccles)
Williams, Rt Hon Alan (Swansea W)


Stinchcombe, Paul



Stoate, Dr Howard
Williams, Alan W (E Carmarthen)


Stott, Roger
Wills, Michael


Strang, Rt Hon Dr Gavin
Winnick, David


Straw, Rt Hon Jack
Winterton, Ms Rosie (Doncaster C)


Stringer, Graham
Wise, Audrey


Stuart, Ms Gisela
Worthington, Tony


Sutcliffe, Gerry
Wray, James


Taylor, Rt Hon Mrs Ann (Dewsbury)
Wyatt, Derek


Taylor, Ms Dari (Stockton S)
Tellers for the Noes:


Taylor, David (NW Leics)
Mr. Greg Pope and


Temple-Morris, Peter
Mr. Clive Betts.

Question accordingly negatived.

Question, That the proposed words be there added, put forthwith, pursuant to Standing Order No. 31 (Questions on amendments) and agreed to.

MR. DEPUTY SPEAKER forthwith declared the main Question, as amended, to be agreed to.

Resolved,
That this House commends the Government's approach to pensions reform, set out in its Green Paper, Partnership in Pensions; congratulates the Government on its determination to end the scandal of pensions mis-selling and its plans to strengthen the financial regulatory system; commends the Government on its commitment to economic stability and low inflation, which helps pensioners; believes that its reforms to the corporate tax system, which will result in the lowest-ever rate of Corporation Tax, will be in the long-term interests of companies, shareholders and pensioners; and approves of the Government's introduction of the Minimum Pension Guarantee, Winter Fuel Payments, the re-introduction of free eye tests and commitment to concessionary travel for the elderly as part of its strategy to provide security in retirement.

Planning

[Relevant documents: Tenth Report from the Environment, Transport and Regional Affairs Committee, Session 1997–98, on Housing (HC 495-I) and the Government's Response thereto (Cm 4080).]

Mr. Deputy Speaker (Mr. Michael Lord): I advise the House that Madam Speaker has selected the amendment standing in the name of the Prime Minister.

Mr. Simon Burns: I beg to move,
That this House regrets decisions by the Government to allow large-scale development in the countryside; deplores the fact that the Government has failed to publish revised planning guidance, despite its promise to do so 12 months ago, which has led to further erosion of the green belt and greenfield sites; expresses concern at the confusion that will be caused by the role given to the regional development agencies in planning issues; and urges the Government to enhance the protection of the countryside, while encouraging urban regeneration, by ensuring an increasing share of new housing is built on brownfield sites.
I make no apologies for the fact that this will be the fourth debate in a little over a year in which the House has had the opportunity to discuss planning issues, primarily the on-going destruction of the green belt, the erosion of green-field sites and the threat to our countryside. Our alarm, shared by millions of people, is at the fact that the Government refuse to act to stop the constant erosion of the green belt and green-field sites and the continued concreting over of land which, once lost, can never be recovered. That is environmental vandalism of the worst kind, and the Government seem to be paralysed into doing nothing about it.
Under this Government, the pattern has become all too familiar. The Secretary of State approves the concreting over of vast tracts of green-field land and building on vast tracts of green belt. He orders county councils to plan for more new homes, overrules his inspectors if they disagree with him and uses the courts to back up his bully-boy tactics. In the light of the Government's behaviour and record, I question whether they understand what the green belt is and why it was put in place.

Mr. Barry Sheerman: Will the hon. Gentleman give way?

Mr. Burns: No, I wish to make a little more progress. If the hon. Gentleman still wishes to intervene later, I will consider it.
For the benefit of the Minister, I should briefly explain that modern green-belt policy was established in the 1950s and is enshrined in planning policy guidance note 2. The fundamental aim of the green-belt policy is to prevent urban sprawl by keeping land permanently open. I remind Ministers that the key quality of the green belt is its permanence, and that that should be altered only in exceptional circumstances.

Mr. John Gummer: Has my hon. Friend noticed that, in the case of Stevenage, the Government have allowed the building of more than 10,000 homes on the green belt and then pretended that they have protected the green belt by extending it somewhere else where it does not provide protection


against urban sprawl? That is sleight of hand such has never been seen before, but this Government seem to have become adept at it.

Mr. Burns: With my right hon. Friend's distinguished record as Secretary of State for the Environment, one would expect him to be able to see through at a moment's glance the flimsy and veiled excuses that the Government use. I assure him that, later in my speech, Stevenage will not escape my notice—nor will West Sussex, Newcastle and Sutton Coldfield.

The Parliamentary Under-Secretary of State for the Environment, Transport and the Regions (Mr. Nick Raynsford): rose—

Mr. Sheerman: rose—

Mr. Burns: I shall give way to the hon. Member for Huddersfield (Mr. Sheerman), because I promised to do so.

Mr. Sheerman: May I jog the hon. Gentleman's memory? Those of us who have been in the House some time remember the destruction of the planning procedures under the previous Government. We knew that every appeal that was turned down by local councillors would be allowed by the previous Government, because they believed that market forces should rule and, every time, green-belt land was built on. The destruction of our countryside happened under the previous Administration.

Mr. Burns: I bitterly regret giving way to the hon. Gentleman, because of the utter claptrap that he has just given the House. I remind him that it was under the Conservative Government that we doubled the size of the green belt, leaving it almost the size of the Principality of Wales.

Mr. Raynsford: As the hon. Gentleman mentioned Stevenage in response to an intervention by the right hon. Member for Suffolk, Coastal (Mr. Gummer), would he care to confirm that, in 1994, when that right hon. Gentleman was Secretary of State for the Environment, 23 hectares of green-belt land in Stevenage were released for housing with the knowledge and approval of the previous Government?

Hon. Members: Oh!

Mr. Gummer: rose—

Mr. Burns: I do not wish to get involved in an internal brawl, but I shall give way to my right hon. Friend.

Mr. Gummer: I wonder whether my hon. Friend would remind the Minister, who has had the chance to refresh his memory on the point, that not only was all the release of land in Stevenage under this Government backed by the Labour council there—so was every release of land in

Stevenage in the past 20 years. The Minister has had 20 civil servants to find his one point, but I remember the issue clearly because the council was so bad.

Mr. Burns: I am very grateful to my right hon. Friend for that point and I shall put the Minister's mind at rest by confirming that I shall return to the subject of Stevenage later.
Ministers do not seem to understand the issue and that is one of the main reasons for the way in which they have behaved in the past 20 months.
The Minister for the Environment displayed his ignorance of planning policy guidance note 2 when he said:
The purpose of the green belt is to provide an area surrounding cities for recreation in open countryside, but as populations grow, as towns change in size, and as new towns are built, it is perfectly reasonable to intervene in the green belt if the overall impact is to increase its size."—[Official Report, 29 July 1998; Vol. 317, c. 437.]
I am sorry that the right hon. Gentleman is not here, but I must explain to Ministers that it is not perfectly reasonable to intervene in the green belt—on the contrary, what is happening up and down the country is totally wrong.

Mr. Oliver Heald: Does my hon. Friend agree that we are talking not about Stevenage but about the land next to it, between Stevenage, Hitchin and Letchworth in my constituency? The Government will create a sprawling conurbation in north Hertfordshire that the people do not want and have campaigned against. It is a disgrace. To talk about 23 hectares as though it is 800 is a laugh.

Mr. Burns: My hon. Friend makes his point tellingly. He probably knows that his concerns are shared not only by Conservatives in his county but by Labour councillors.
The Minister for the Environment should consider his Department's PPG2 and learn that the purposes of the green belt are to prevent urban sprawl, to prevent towns from coalescing, to protect historic towns and to encourage urban regeneration. When we were in government, we lived up to that policy. The green belt doubled in size in our time and we left in place a designated green-belt area the size of Wales.
What have this Government done? They have certainly lived up to the Deputy Prime Minister's proud boast, which may have been a Freudian slip, when he said:
The green belt is a Labour achievement—and we intend to build upon it.
He and his party have certainly lived up to that boast.
The Deputy Prime Minister has given the go-ahead for 10,000 new homes on green-belt land near Stevenage. In the face of opposition from the Conservatives, a Liberal Democrat-Labour pact dragooned the proposal through Hertfordshire county council, despite the opposition of the Labour leader on North Hertfordshire district council, who said:
We feel very let down.
Is anyone surprised? He continued:
The Government claims to be committed to protecting the environment and regeneration of urban areas and now we have them supporting plans to rape 2,000 acres of greenbelt.


That is a damning indictment of new Labour actions by a new Labour council leader.

Barbara Follett: rose—

Mr. Burns: The Secretary of State approved 2,500 more homes in the green belt outside Newcastle, despite there being 4,000 empty homes in one part of the city alone. That decision was greeted by the off-message hon. Member for Newcastle upon Tyne, Central (Mr. Cousins) with the reflection that it would accelerate the decline of inner-city areas such as his constituency.

Barbara Follett: I thank the hon. Gentleman for giving way. As he mentioned my constituency several times, it is the least that he could do. If the Conservative party is so keen on preserving the green belt, why did the right hon. Member for Suffolk, Coastal (Mr. Gummer), in one of his last decisions as Secretary of State for the Environment, release 50 acres of metropolitan green-belt land in Surrey and another 428 hectares to Manchester airport?

Mr. Burns: Oh dear. Good try, must do better. The hon. Lady has her crib sheet, but I am afraid that, in cases such as Manchester airport, there are very exceptional circumstances. What we decry is the fact that the Government have brushed aside very exceptional circumstances. It is now almost the norm that anyone who wants to build on green-belt land, can. [Interruption.] If the Minister for the Regions, Regeneration and Planning listens, he will hear more examples of what has gone on in the past 20 months under this Government in respect of the desecration of the green belt and green-field sites.

Mr. Gummer: Will my hon. Friend tell the hon. Member for Stevenage (Barbara Follett) that airports can hardly be built on brown-field sites in the middle of a city? If she fought for her constituency, no homes would be built in the green belt; they would be built on brown-field sites.

Mr. Burns: I am sure that the hon. Member for Stevenage (Barbara Follett) heard those comments.
The hon. Member for Newcastle upon Tyne, Central said that the decision in Newcastle would accelerate the decline of inner-city areas such as his constituency.

Mr. Jim Cousins: The master plan that implements the 2,400 houses in the green belt is now before the Minister. I have great hopes that he will put some brakes on approval of the master plan to allow some checks and balances to be introduced so that the release of land will not compromise the regeneration of the inner city, which is my policy and that of my Government.

Mr. Burns: I am interested by that, even if it is slightly off message. No doubt the Minister heard that plea. When the hon. Gentleman at first criticised the decision by saying that it would accelerate the problems of inner-city areas such as his, he rightly, as a good constituency Member, went on to say that he would fight the proposal to the best of his abilities. I respect him for that. I suspect that the controllers in Millbank will not be thrilled but as

a constituency Member he is right to fight Government proposals to do something on green-belt land that could accelerate the problems of the inner city in Newcastle.
It is owing to the direct intervention of the Deputy Prime Minister in West Sussex that the total number of houses that it has to build by 2011 has been increased from 37,900 to 58,700. Despite the right hon. Gentleman's lofty statement,
planning will remain clearly under local control",
to achieve the target, in defiance of the local authority, he overruled his own inspector and the decision ended up in the courts. True to form, he managed to upset, among others, the Labour leader on West Sussex county council, who declared:
This is the starkest possible illustration that the Government has no intention of trying to provide a greater share of … new homes on brownfield sites rather than on greenfield sites in the countryside.
Similarly, the west midlands has not escaped the Deputy Prime Minister's attention. Up to his usual tricks, he once again overruled his Department's independent planning inspector to allow 150 acres of green-belt farmland in Sutton Coldfield to be used for development. Interestingly, the land was owned by Labour-controlled Birmingham city council.
It would be unfair to accuse Environment Ministers of not always taking a close interest in the green belt. That would be a travesty because we all know of the keen interest of the hon. Member for Mansfield (Mr. Meale) through his assiduous lobbying of Environment Ministers and officials to promote two major schemes in green belt in Barnet—140 miles from his constituency—when he was Parliamentary Private Secretary to the Secretary of State.
Criticism of the Secretary of State's actions has not been restricted to Labour councillors whose areas have been adversely affected by his environmentally damaging decisions. The Labour-controlled Select Committee on the Environment, Transport and Regional Affairs has been equally scathing. In its 10th report on housing last year, it described the answers that one Minister gave as, "vacuous and disingenuous". The whole report was a thinly veiled attack on the dithering inaction that characterises the Government's attitudes to housing provision and the green-belt and brown-field sites policy. The Select Committee described the proposals in the White Paper "Planning for the Communities of the Future" as, "well-intentioned, but vague" and concluded,
we do not believe that they will be adequate to achieve their aims".
I suspect that time will prove the Committee's analysis to be spot on.
The challenge to the Government on whether they will halt their environmental vandalism will come with the 4.4 million new households that are projected to be needed by 2016, although there are strong rumours that the DETR will revise that figure upwards to 5 million houses before Easter. The House would be grateful if the Minister could confirm in his reply whether there is any truth in those rumours, or at least clarify his position.
We have always maintained that as much of that house building as possible should be on brown-field sites. In our manifesto for the last general election, we called for a target of 60 per cent. brown-field site building. In February 1998, my right hon. Friend the Leader of the Opposition proposed that the figure should be revised upwards to 66 per cent.


Interestingly, the Government reversed their position in the Secretary of State's statement in February 1998, when the right hon. Gentleman increased—

The Minister for the Regions, Regeneration and Planning (Mr. Richard Caborn): Rubbish.

Mr. Burns: It is a statement of fact that the Secretary of State revised his figures upwards from 50 per cent. to 60 per cent. in February 1998. Ironically, only a year before, his own junior Minister, the hon. Member for Greenwich and Woolwich (Mr. Raynsford), had told Planning Week that a target of 60 per cent. would be "a recipe for disaster". I am grateful that the hon. Gentleman is here. Perhaps he can enlighten us on how he has managed to square his views with his boss's change of heart. I suspect that if there is one right hon. Gentleman who does not take kindly to having his policies described by one of his junior Ministers as "a recipe for disaster" it is the Deputy Prime Minister.
Achieving the 60 per cent. target needs an urgent revision of PPG3 because that guidance will set out the details of the policy and the sequential approach to housing sites. The revision was announced in February 1998, but one year on, virtually nothing has happened. No consultation draft PPG3 has appeared. The Minister for the Regions, Regeneration and Planning promised it to my hon. Friend the Member for South Cambridgeshire (Mr. Lansley) in time for his public examination, which will take place next week.

Mr. Andrew Lansley: My hon. Friend might like to know that the examination in public for East Anglia began yesterday. I will be giving evidence to it next Tuesday. On 22 October, the Minister promised me,
I will ensure that he"—
meaning me—
has the revised PPG3 in his hands".—[Official Report, 22 October 1998; Vol. 317, c. 1447.]
That simply has not happened. How can certainty, which the Minister says is important, be achieved at such a regional examination without the essential guidance?

Mr. Burns: I am grateful to my hon. Friend, but I have some sad news for him. He will not have the consultation draft in time for his public examination. Officials at DETR said only late last week, following a telephone inquiry, that the draft that the Minister promised my hon. Friend in time for his examination is likely to appear in about a month's time.
As the Minister knows, it usually takes 12 months from publication of a consultation draft to the production of the final draft. It is likely that the revised PPG3 will not appear this millennium. The delay will have a significant impact. Housing starts are running at around 150,000 houses a year. The delay in PPG3 means that it is difficult to apply the new approach to planning permissions and development plans. The effective delay of the 60 per cent. target by a year will mean 15,000 extra dwellings on green-field sites. At a typical density figure of 25 dwellings to the hectare, that will mean that an extra 600 hectares per year will be lost to housing development.
The dithering and delays on PPG3 are a damning indictment of this Government and their approach in the past 20 months. As they dither, more building takes place on green-field sites. Their response has been too little too late. As the Select Committee points out, the Government's 60 per cent. target is weakened by phasing it in over 10 years. While they dither, local authorities and regional planning conferences are expected to apply the old figures to their plans. The Minister's hollow words about "bottom-up planning" have been exposed as a sham by the constant interference of the Secretary of State in local decisions.
Tonight, I hope that the Minister will tell the House when the draft version of PPG3 is to be produced, when the final version will be produced and why it is taking so long for the Government to revise their guidance.
Finally, on the role of regional development agencies in the planning process, interestingly the DETR's figures show that, out of a total of 103 members on the eight boards, nearly one in three are Labour placemen, with 32 members having Labour party connections, eight having Liberal Democrat connections and six having Conservative connections. It certainly seems like jobs for the boys. Notwithstanding that, it would be interesting to learn more about the role of the RDAs in planning. The legislation is extraordinarily confusing about precisely what they will do. Will they simply muddy the water by interfering in the normal process, thus bringing a system that is already bursting at the seams into greater difficulties? Will they be able to influence Ministers in any way to prevent erosion of the green belt and green-field sites? Or will they be a white elephant with no real role to play in planning, simply causing confusion, trouble and conflict between the regional planning conferences and the local authorities?
I said that, in the past 20 months the green belt had been attacked and green-field sites had been destroyed owing to the dithering and, sometimes, the direct intervention of Ministers, who pay lip service to environmental protection but do nothing to stop the destruction of the green belt. As the Council for the Protection of Rural England stated, in addition to all the damage caused so far, large tracts of green-field land in Hampshire and Devon are under threat of building as a result of Government pressure for more housing. In Yorkshire, Humberside and the north-east, there are plans to release green-belt land and green-field sites for development. In Staffordshire and around Bristol, there are plans to release green belt for development. New statistics show that there has been no increase in the amount of housing built on recycled land.
Enough is enough. It is time that the Government did something rather than mouthing pious platitudes as our countryside is turned into a concrete jungle.

The Parliamentary Under-Secretary of State for the Environment, Transport and the Regions (Mr. Nick Raynsford): I beg to move, To leave out from "House" to the end of the Question, and to add instead thereof:
welcomes the Government's continued commitment to protecting the countryside, including green belts, and promoting sustainable regeneration in towns and cities; recognises that the Government's decentralised and integrated policy approach, as stated in Planning for Communities of the Future, Modernising the Planning System and A New Deal for Transport, is helping to achieve more


sustainable and equitable patterns of urban and rural development; welcomes the Government's commitment strictly to control development in the open countryside and to increase the proportion of new housing on previously—developed land in urban areas, smaller towns and villages from 40 per cent in the mid—1980s to 60 per cent; recognises the need to replace the previous predict and provide approach to the issue of household growth with a more flexible decentralised system, involving realistic regional targets for the building of new homes on recycled land, tighter controls on urban sprawl, new regional and housing planning guidance to ensure the adoption of sustainable solutions to housing development and more rigorous and detailed assessment of land availability; and believes that the Government's inter-linked policies for urban regeneration and protection of the countryside will enhance the quality of life for people in both rural and urban areas.
I particularly welcome this debate as a further opportunity to set out the Government's achievements in planning for the communities of the future. After 18 years of Tory drift and indecision, characterised first by laissez-faire, during which any development on green fields or green belt was regarded as not only acceptable but desirable by the bigots of the right, and latterly by a death-bed repentance—years in which the countryside and the green belt were sacrificed again and again by Ministers in the former Government who are now masquerading as their defenders—this Government are moving ahead purposefully with their policies of sustainable development and with a modernised planning framework. Over the past 20 months, we have made considerable progress on developing a coherent policy that reconciles the need to provide sufficient land for housing with protecting the countryside from unsuitable development.
Before I set out the Governments' policy and achievements, let us reflect briefly on our inheritance. We inherited from the previous Government a record that entirely belies their rhetoric this evening. Not only did the previous Government preside over a housing crisis, with the worst levels of homelessness and house repossessions in any years since the war, but they allowed extensive development all over the countryside. During the decade 1985 to 1995, they achieved on average only 42 per cent. of new development on recycled or brown-field sites. They were also profligate with the green belt, releasing on appeal more than 500 hectares for development in their last year in office alone, and presiding over the redesignation of a further 700 hectares in that same year.
The hon. Member for West Chelmsford (Mr. Burns) said that, in exceptional circumstances, the release of land in the green belt might be acceptable, but let us look at the Tory record and see how exceptional the circumstances were in the Conservatives' last year in office. In July 1996, the then Secretary of State agreed the release of 23 hectares of green belt in Caddington near Luton against the recommendation of the inspector, who had recommended refusal of planning permission. In March 1997, he approved the release of 50 hectares of land at Mizens farm, Woking for a development relating to a motor car which featured in the disastrous election campaign of the then Prime Minister, the right hon. Member for Huntingdon (Mr. Major): the wheels fell off both the car and the campaign. Two months earlier, in January 1997, 428 hectares were approved at Manchester airport.
Those decisions were made by the Secretary of State on appeal, but in that same period he was also aware of, and presided over, the following additional redesignations of green belt: in Dartford, 250 hectares approved for

development; in south Staffordshire, 148 hectares; in Cannock Chase, 71 hectares; and in Solihull, 260 hectares. The total amount of green belt approved for development use in the last year of the Tory Government was more than 1,200 hectares. That is their record, so it is utterly hypocritical of them to pretend now that their record on that issue is anything other than shameful.

Mr. Crispin Blunt: I was elected in April 1997 in a constituency that falls almost entirely within the green belt. I want to see Government action, not hear Government rhetoric. I shall be just as critical as the Minister of the previous Government's record, but I want action from the Labour Government. All we have heard so far is rhetoric and all we have seen is the massive extension of building on the green belt.

Mr. Raynsford: So far, all we have heard is a brief correction of the record, so as to cure the selective amnesia of Conservative Members who prefer to forget the Conservative Government's record. However, I shall go on to set out in detail the Government's proposals to provide a proper framework for planning that reconciles the pressures on the green belt and green-field land with our need to provide housing.

Mr. James Gray: Speaking of selective amnesia, does the Minister recall the date 23 January 1997, when he told Planning Week that there was "absolutely no doubt" that the only realistic way to meet the housing figure was to develop new towns and settlements? Does he recall telling Planning Week that? Does he stand by that statement, or does he now regret having made it?

Mr. Raynsford: No, I do not. I recognise that there is a role for several different vehicles in ensuring that we meet housing needs. New settlements are potentially one of those vehicles and I make no apology for that. We attempt to address the issues realistically and sensibly, whereas the Opposition spout rhetoric that is totally at variance with the Conservatives' actions in office.

Mrs. Linda Gilroy: That rhetoric is indeed synthetic. Is my hon. Friend aware that our hon. Friend the Minister for the Regions, Regeneration and Planning was recently involved in the commencement of the clearing of Seaton barracks, which is one of the many Ministry of Defence properties that we have been trying to put to use? The previous Government's record was absolutely abysmal; had they taken planning issues seriously, they would have taken the issue of former MOD sites far more seriously than they did.

Mr. Raynsford: I strongly agree with my hon. Friend, who has highlighted one of the positive steps that the Labour Government are taking to ensure that opportunities are grasped to bring into use currently unused sites in urban areas and brown-field land, instead of building on green-field sites.

Mrs. Teresa Gorman: Will the Minister give way?

Mr. Raynsford: I am having some difficulty meeting the objective set by the hon. Member for Reigate (Mr. Blunt). I shall give way to the hon. Lady, but then I must make progress.

Mrs. Gorman: I thank the Minister for giving way. Would he dispute the fact that, within central London, approximately 6 square miles of brown-field land has been identified? Most of the sites lie within the areas of Labour-controlled councils, which have refused to allow development, despite the fact that some of the land has been left lying since the second world war?

Mr. Raynsford: I do not dispute the fact that there is a substantial number of brown-field sites in London, as there are in other urban areas. It is precisely to get such sites into use that we are taking the steps that I shall set out tonight.
The Labour Government also inherited a consultation paper "Household growth—Where shall we live?", which illustrated the death-bed repentance which I mentioned earlier. It tentatively posed the question whether to raise the target for building new housing on previously developed land from 50 to 60 per cent., but set out no detailed proposals, let alone a well-thought-out way to achieve that. Since May 1997, we have set about filling that vacuum: first, by confirming the 60 per cent. target for new houses on recycled brown-field sites; and, secondly, by producing a comprehensive approach to developing our towns and cities and reducing the number of green-field sites that will be needed for development.

Mr. Burns: Will the Minister give way?

Mr. Raynsford: No, I must make some progress. I hope that the hon. Gentleman will bear with me as I do so.
The Government set out our position in last February's policy statement "Planning for the Communities of the Future". We proposed to move away from the previous Administration's predict and provide approach to a new approach based on the principles of plan, monitor, and manage. We recommended devolving decision making by relying more heavily on joint regional planning conference/Government office assessments of housing requirements to ensure greater local accountability and local responsibility for deciding final figures and monitoring the outcome. We also announced our intention to revise Government planning policy guidance for housing—planning policy guidance note 3—on which a consultation draft is to be published shortly. That guidance will provide sharper and more rigorous definitions of previously used land and urban capacity, explain how the new land recycling targets are to work and explain how a sequential approach and phasing of local authority land release will work.
Last year, the Environment, Transport and Regional Affairs Committee gave further attention to the issue. After a thorough review, the Committee concluded that we were going in the right direction. However, I know that there are still people who need to be convinced. All those who have looked carefully at the way in which the future housing requirement projections are made have come to the same conclusion as the Committee: that the methodology is basically sound and there is no better

framework immediately available. However, that does not prevent the flat-earthers on the Opposition Benches from raucously denouncing the figures, even though—as their selective amnesia has obviously caused them to forget—the figures were produced in the lifetime of the previous Conservative Government and published by that Government.
We want to maximise the use of previously developed land. To realise that aim, we have adopted a national target of 60 per cent. of all additional housing being built on previously developed land.

Mr. Burns: Given the fact that Government policy has changed to having a 60 per cent. target, does the Minister still stand by his pre-election statement to a magazine that to move from a 50 per cent. target to a 60 per cent. target would be a "recipe for disaster"?

Mr. Raynsford: The response that I gave, which I am happy to defend, was that plucking a figure out of thin air, as the previous Government did, was a recipe for disaster. One cannot plan by that means, although the Opposition have a lot of experience of it. They have plucked from the air figures of 60 per cent., then 75 per cent., and the Leader of the Opposition has produced a figure of 66 per cent. No one knows the basis for any of those numbers because no serious research or analysis has been conducted. The problem with the Opposition is that they can come up with only rhetoric, not substance. If the electorate are to have confidence in the political process, it is fundamental that targets set by Government are soundly based on a proper understanding of what is feasible and attainable. That is this Government's approach.
That is our baseline position—if it is possible to do better we will, but first we must establish what is feasible. We have put in place the national land use database, which will provide the first countrywide assessment of what previously developed land is currently vacant and available. Given the Opposition's comments, is it not extraordinary that, when the Labour party came into office, there was no way of knowing where the recyclable land was or how much brown-field land was available? There were no records: the Conservatives had been in government for 18 years and had taken no practical steps to implement a proper policy for brown-field development.

Mr. David Drew: Will my hon. Friend confirm that not only were no national data collected under the Conservative Government, but local authorities had never been asked whether they had vacant land that could be recycled?

Mr. Raynsford: My hon. Friend has a lot of experience in this matter and he makes an extremely valid point.
The national land use database will be published this spring. For the first time, the database will give local authorities information from which to derive their own regional and local targets. With that information, we will expect the regional planning conferences to produce challenging, but realistic, targets for their regions.
The Government are systematically putting the mechanisms in place. The urban task force, headed by Lord Rogers, is exploring how best we can bring vacant


or under-used urban brown-field sites back into use. The task force has already presented its interim findings and will report fully later this summer. It will undoubtedly provide much helpful guidance, for developers and local authorities alike, on how to make the optimum use of opportunities for recycling urban land and buildings.
We believe that higher densities for housing developments may be appropriate in suitable locations, such as near urban centres with good transport links. However, they must be designed to a high standard and provide a good-quality environment. We are not advocating insensitive "town cramming". We are not suggesting building on open spaces and playing fields in urban areas, or at very high densities, but we are suggesting making better use of land. Those who support reducing the impact of the countryside should support that approach.
Above all, the challenge is how to make towns and cities places where people will want and choose to live—a theme that will run through our forthcoming White Paper on urban matters. My right hon. Friend the Deputy Prime Minister set the tone by calling last year for an urban renaissance. That will need positive and proactive planning at the local level, with more imagination and vision. Focusing development back into our towns and cities will require much more creative thinking about "place making". Design will be a critical element. In many cases, it will mean the gradual remodelling of existing communities, but there will also be opportunities for larger projects, such as urban villages, of which the millennium village in my constituency of Greenwich and Woolwich will be a flagship example.
I also welcome the opportunity today to reiterate the Government's policy on the green belt. The green belt is an essential and very important tool of planning policy, and one to which the Government remain totally committed. The strong presumption against inappropriate development in the green belt also remains. Such development would be permissible only where very special circumstances justifying development outweighed the harm to the green belt.
However, we must also demolish a few myths about the green belt. The green belt is not being reduced. Since May 1997, approximately 30,000 hectares have been earmarked for addition to the green belt. That is an area three times the size of Bristol. The green belt now covers more than 12 per cent. of England.

Mr. Dominic Grieve: I understand that the Minister is extending the green belt. New rural land is being taken out to add to the green belt, while land that was to have been used only in exceptional circumstances is being swallowed up. Is that not a bit pointless?

Mr. Raynsford: The hon. Gentleman is a little impatient. If he will bear with me, he will hear a number of remarks on those specific matters. I accept that they are difficult issues, and that they must be tackled honestly and realistically, not in a facile manner.
I have emphasised that the green belt is not being reduced. I also wish to stress that green belt does not mean green field. Green-field land is any undeveloped land. Not all green belt is free from development: often the development was there before the green belt was defined. Development proposals in the green belt frequently

involve the redevelopment of previously used sites. It is established policy to try to ensure that such redevelopment yields environmental improvements, compared with the development that it replaces.
Equally, "green belt" is not a landscape designation. It does not imply an area of outstanding natural beauty. All kinds and qualities of land, including derelict sites, may be in the green belt. Most green belt is ordinary agricultural land. Less than 5 per cent. of green belt overlaps with statutory national landscape or wildlife designations.
Green belt is not a national designation: it is primarily a local designation. Decisions about the setting and altering of boundaries, or about permitting development, rest primarily with local authorities. However, the Government attach considerable importance to green belts, where they have been established. That is why we have national planning policy guidance, indicating the weight that we attach to their continued protection.

Mr. Lansley: Given the importance that the Minister ascribes to the green belt, and given his explanation of its purpose, will he communicate with Labour-controlled Cambridge city council, which proposes to swallow up green-belt land in the south of the city? Part of the land affected is in my constituency, and the council justifies its proposal by saying that the landscape would be enhanced.

Mr. Raynsford: If the hon. Gentleman will bear with me, I shall come to precisely that point. The issue is interesting and difficult. There is substantial economic growth in Cambridge, where green-belt designated land surrounds the area tightly. That poses special problems, with which I shall deal in a moment.
Let us set out what green belts should be. Green belts should fulfil the objectives and purposes of PPG2: to prevent urban sprawl; to stop towns merging with one another; to safeguard the countryside against encroachment; to preserve the setting of historic towns and to encourage urban regeneration. As far as possible, green belts should, among other things, benefit the urban population by providing accessible open countryside and outdoor recreation facilities that enhance the quality of life. They will be effective in achieving those aims only if they are consistent with principles of sustainable development. Whether or not that was a guiding principle when any particular green belt was designated, it is certainly our guiding principle now.
Sustainable development means striking an appropriate balance between social, economic, environmental and natural resource considerations, and it has regard to the needs of future generations as well as the present one. Sustainability is not just about reducing car use, although some superficial commentators think that it is. The impact—positive or negative—of a development on the environment of an area must be taken into account, as must the question whether it will improve the quality of life for the wider community.
Sustainable development is about positive planning, but green belts are often used merely negatively, simply to prevent development. Some green-belt boundaries are too tight, and are then nibbled away piecemeal by departures from development plans. The Select Committee on Environment, Transport and Regional Affairs recognised that problem by stressing the need for the protection of the


inner boundary of the green belt to prevent urban sprawl. However, it did not say how it believed that was to be reconciled with its other recommendation that
the great majority of … new homes on greenfield sites should be built as extensions to existing urban areas".
There is no doubt that there is an inherent conflict here, and that difficult conundrums must be faced and resolved. Green belts are meant to safeguard the countryside from encroachment, but new development may leapfrog the green belt, encroaching into deeper countryside and establishing travel patterns which involve more and longer journeys, putting further pressure on the environment. That is simply not sustainable planning.
PPG2 makes it clear that alteration of green belts should be contemplated only where alternatives in the urban areas contained by or beyond the green belt have been fully considered. While urban brown-field land suitable for redevelopment remains, we would not expect local authorities to release sites in the green belt.
Our policy document "Planning for the Communities of the Future" identified the possibility that the green belt might, in exceptional circumstances, offer a more sustainable location for necessary new development than sites outside the green belt. That is why we accepted, for example, the decision by Hertfordshire county council to take land to the west of Stevenage out of the green belt. That decision offered the most sustainable solution for the location of new development in the county. No one can doubt that it was a hard decision, just as no one can fail to appreciate the concerns of those who greeted it with dismay. It is clear that over-adherence to green-belt boundaries may lead to unsustainable outcomes, and, in the county council's judgment, a mass of indiscriminate development over a much larger area of rural Hertfordshire would have been unsustainable.
The Government are fully committed to the countryside. Indeed, more Labour Members than Conservative Members represent rural areas. Our concern must, however, be not just with enjoyment of the countryside for its own sake, but for those who live and work there. The Government are to produce a White Paper for rural England later this year. Rural England is changing, and we must respond to that change. The White Paper will set out the longer-term future for the English countryside and consider how policies on the economy, health, education, crime, agriculture, the environment and housing will support a sustainable countryside and rural communities in the future. It will consider how the prosperity and competitiveness of the rural economy can be strengthened, how development and regeneration policies can help areas in need, and how we can make sure that all people who live in rural areas have opportunities to participate fully in society.
The White Paper will be produced jointly by my Department and the Ministry of Agriculture, Fisheries and Food, and it will involve a wide range of other Departments and agencies. We plan to issue soon a discussion document that will set out key themes and invite comments, and we will talk to a range of interested people and organisations. We will look closely at how the urban and rural White Papers can complement each other to build a clear and comprehensive strategy for the future.
The Government have a coherent planning policy programme for urban and rural areas alike, and we are putting in place mechanisms to deliver it. Our

commitment to the countryside and the green belts remains as strong as ever. The Conservative motion is a shallow, hypocritical and opportunistic ploy to divert attention away from the previous Government's abject failure to set in place clear, firm policies for sustainable development and the protection of the countryside. Their record then makes nonsense of Conservative rhetoric today, and the motion should be consigned, as they were in 1997, to the dustbin of history.

Mr. Matthew Taylor: There are good reasons for tonight's debate. At present rates of development, one fifth of England will be urban by 2050, with a green-field area the size of Bristol being built on every year. However, so far, most of what we have heard tonight has been a party political battle. It would help us to remember that the Conservative Government set the 4.4 million predict-and-provide target. Equally, the Labour Government have so far failed to get us out of it. That is why we have suggested that the Conservative motion might merely be amended to refer to the party's record as part of the problem. The Minister has more accurately represented some of the real difficulties that the Government face than did anything that we heard from the hon. Member for West Chelmsford (Mr. Burns).
The figure of 4.4 million new homes by 2016 was the product of a Conservative Government who allowed huge green-field and out-of-town developments to take place, often after overturning local council objections. Too late, that Government recognised the problem. The Minister neglected to mention that the proportion of development on brown-field sites was rising towards the end of the Conservative Administration, but they were shutting the stable door long after the horse had bolted. Many developments, particularly out-of-town stores around the country, are all too physical evidence of that.
The Deputy Prime Minister vowed this time last year to break the mould of predict and provide. Those were fine words, but action has been slower in coming. It has certainly been slower than everyone wants, and slower than it should have been. Reports suggest that the Government are considering an increase to the original new homes figure.
In The Guardian on 14 January, Lord Rogers, who chairs Labour's urban task force, suggested that the 4.4 million could rise to 5 million based on new population projections that show higher-than-expected increases in the south and in East Anglia. Other newspaper reports have suggested much the same. The Minister for the Regions, Regeneration and Planning went on record in an interview for Country Life in June 1998 to confirm that he—and, presumably, his Department—believes that the current estimates for required new housing are too low. He said:
The figure of five million is entirely speculative but it will be in excess of 4.4 million.
Yet, in his statement on 23 February 1998, the Deputy Prime Minister promised to abandon predict and provide, and to protect our green fields, saying:
It is our firm policy to protect our countryside and revitalise our towns and cities".—[Official Report, 23 February 1998; Vol. 307, c. 22.]
The Liberal Democrats welcomed the emphasis placed by the Deputy Prime Minister on the need for an urban renaissance for the benefit of both town and country, and


on a higher target for housing on previously developed land. We welcome the move away from predict and provide, a move for which we have long campaigned. However, the Government seem still to be confused about whether they really mean what they said.

Mr. Grieve: Does the hon. Gentleman agree with two things? First, times have changed. Over the past decade, perceptions of what is acceptable development have altered, on a European basis. Secondly, the Government have come up with the notion of sustainable development as the centre of their policy, and the figures advanced for the amount of housing required do not fall within the category of sustainable.

Mr. Taylor: It was not the Labour Government who invented the term sustainable development, but they have certainly said that they will implement the idea. I welcome that. There are questions about the figures, and I have raised my own concern. There are even bigger questions of whether policies are in place to achieve sustainable development, about where development goes and about how it evolves.
The debate on "Planning for the Communities of the Future" took place almost a year ago. So far, however, the Government's strong rhetoric has not been matched by strong action. The real failure contained in Labour's amendment to the motion is their failure to recognise that action has not been taken. As Tony Burton, assistant director of the Council for the Protection of Rural England, said in The Times at the end of January:
We are living in a policy vacuum. While Prescott talks about urban renaissance and the best use of recycled land, green fields are being built on.
No new planning policy guidances have been issued. We are told that the new draft PPG on housing will be published soon, but it has not been produced yet and it has taken too long. Without scrapping existing planning guidelines and starting over, little can change. Meanwhile, applications are still dealt with on the old predictand-provide basis and on old structure plans based on premises in place under the previous Government. Those plans will remain in place for many years to come unless the Government come up with a fast scheme to revise them.
How far have Ministers succeeded in preparing regional planning guidance that will allow local authorities to review their development plans quickly? Labour is still passing the buck. The Government claim to be decentralising planning control, but they are continuing with business as usual. In Hampshire, the Government pressed the authorities involved in the Hampshire structure plan to increase planned housing provision for 2001 to 2011 from 44,000 to 56,000, in line with regional planning guidance. That is an old decision, based on old policy.
The Deputy Prime Minister himself has forced Devon to accept house-building targets that will reduce large areas of the county to urban sprawl. Countryside near Broad Clyst, the National Trust village near Exeter, and in South Hams, between Dartmoor and the sea, will be desecrated by thousands of new homes.
The Department of the Environment, Transport and the Regions issued a statement on 1 April 1998 outlining the implications of the White Paper, "Planning for the

Communities of the Future", for the development plans and regional planning guidance currently under review. The statement on transitional arrangements straightforwardly, and rightly, admits that the full implications of the White Paper cannot be felt until RPG and structure and local plans have been reviewed around the country. None of the good words can possibly turn into action for years to come.
Without the right planning rules and financial incentives, the good words may make little difference in the long run. There is a need to move forward. If the Government believe all that they have said about protecting the countryside, and that their new approach will make a real difference, it is time that they put in place mechanisms to allow councils to take decisions on the new basis instead of on the policies for which the Government have rightly criticised their predecessor.
The White Paper also contained a statement on green-belt land, with which it is difficult to disagree. It said:
There might exceptionally be benefits in releasing for development indifferent Green Belt Land, if that means protecting better quality land elsewhere".
The Minister highlighted the dilemmas there, and he was right to do so.
However, the principle of green belt is that, once allocated, it provides protection on which people can rely. If new green-belt land is allocated, that is a bonus, but we are not talking about a mathematical equation. It is not all right to add land here at the expense of land developed elsewhere. The green belt is intended to provide genuine protection for the countryside around developed areas, preventing urban sprawl, not to be altered at will.
If the Government genuinely believe that much green belt was wrongly allocated in the first place, it is far better to review the matter as a whole and consider it independently, by means of a commission, an inquiry or whatever, than to take ad hoc decisions, tearing up protection and justifying that by additions elsewhere.
We have seen that happen in Newcastle-upon-Tyne, where the unitary development plan proposes the development of 2,500 executive houses and a business park on 480 hectares. Earlier, reference was made to the 2.5 square miles of green belt west of Stevenage in Hertfordshire which was released last year for 10,000 houses. The Minister is right to criticise the previous Government's record on release of green belt. Clearly, the previous Government was at least as culpable and arguably rather more so. Nevertheless, that is the biggest single release of green-belt land ever and does not appear to match up to Labour's rhetoric.
Nothing can be guaranteed altogether, and these are difficult issues, but development should be exceptional, certainly not large scale and commonplace, as it was under the previous Government and still is now.
In June 1998, the Deputy Prime Minister said that the Government's policy has added an additional 30,000 hectares of land to the United Kingdom's green belt. Adding new land to the green belt is easy. Any Minister can do that simply with a stroke of a pen. It is resisting its future development that is the issue, and, on that, the Government are failing in their own terms.
Green-field and green-belt sites are still being developed as before, local councils are still being encouraged to build more homes than they think


they need, and Labour is still umming and ahhing about whether the figure of 4.4 million new homes stays, increases or is dropped altogether.
The Liberal Democrats believe that there is a straightforward package of measures that the Government should adopt to stop unnecessary development in the countryside and revitalise our towns and cities. The two go hand in hand and the Minister was right to say so.
The revision of PPG3 could and should have been completed earlier. That would have provided a clear sign in national planning guidance of the change in approach, and would have immediate effect by now. The Government are in favour of that change, and that is welcome, but it is still unpublished, even in draft, and the final version is probably 12 months away.
We advocated a stop to controversial major new development plans and approvals until the new PPG3 is published. That would ensure that the Government's plan, monitor and manage strategy became a reality within months, not years, but it has not happened.
In the White Paper "Planning for the Communities of the Future", the proposed new regional planning system leaves the DETR to produce the projections and the regional planning conferences to produce the guidance, but the Secretary of State has the final say as to whether the figures are acceptable. We are not really moving from predict and provide; the Government are simply disguising their own role. That allows the Government to pass the buck under the guise of regional decision making, but to have the final say if they do not agree with the plans—a factor that will rest heavily on the shoulders of those given that responsibility at regional level.
In the same document, the Government aim to raise the proportion of new homes built on previously developed land from 50 to 60 per cent., but state that a national target may not be meaningful at regional or local levels. Perhaps so, but how will the Government co-ordinate the regional targets in order to ensure that they all add up to the desired 60 per cent. nationally, or is it a target for which the Government will not accept responsibility, arguing that, unfortunately, decisions were taken at a local level that they did not want, but they did not intervene because they were decentralist?
Changing planning policy is part of the way to achieve that, but we need to recognise that financial and social pressures are also involved. The Minister asked for the Liberal Democrats' suggestions. I agree with what the Government are arguing for, but I am pointing out that they have not done it and, until they do so, they cannot deliver. Changing planning policy is only part of the solution, and I want to deal with a couple of fundamental points before I finish. At the moment, it is far cheaper and less risky, and so more profitable, to develop green-field sites.
That financial imperative is probably as big as any planning ones. Developers will repeatedly put in applications until local opposition is worn away, in the hope that they will eventually make the profits. The profits are big enough to allow them to do so. Therefore, we need to introduce a levy on the windfall profits made on green-field development, levelling the financial playing field between development on green-field and brown-field sites. That would reduce the financial

advantages of developing green-field sites, and raise funds that should be earmarked for local environmental improvements and the decontamination of brown-field sites, helping with the costs of developing them.

Mr. Gray: Liberal Democrats are always on about levies on green-field sites for green-field development. Does he agree that, if such a measure were in place, all that would happen would be that those houses which are built on green-field sites would be more expensive—larger, middle-class, executive-style homes? Developers would not care in the least about a green-field levy. It would be an incentive to build on the green-field sites that the hon. Gentleman seeks to protect.

Mr. Taylor: I do not see that the fact that it would be more expensive for a developer would be an incentive to build on those sites. Those funds would be used to reduce the costs of building on brown-field sites, equalling out the playing field that is currently weighted towards the green-field sites.
In addition, building on green-field sites is positively encouraged at present, and re-development discouraged, because no value added tax is charged on new development, whereas the refurbishment of empty homes and offices carries the full rate. That urgently needs changing. Re-balancing VAT to provide an equal VAT cost on re-development of derelict buildings and green fields, bringing one down and putting the other up, at no net cost to the Exchequer, could dramatically change the financial picture, yet there are no new economic instruments from the Government. I am glad to say that Lord Rogers urban task force has, in its interim report, recommended them.
I hope that the Chancellor of the Exchequer will come forward with proposals in the Budget. I am sorry if I sound a little negative, but, so far, the Chancellor has been extremely slow in coming forward with any environmentally friendly and sustainable changes to taxation policy. In fact, recently, he won a grey ribbon award for his bad record on the environment, so I am not optimistic. If they do come, we will welcome them, and they will help to achieve the 60 per cent. target—which is unrealistic without them—and move us towards the 75 per cent. target that the Government round table on sustainable development, and the Lord Rogers task force, suggested.
We must also address the fact that many people want to leave urban areas because the policy in cities and towns is going wrong. Tackling the problems of a derelict environment, high crime levels and poor schools is fundamental if we are to persuade people to stay in our cities. We should bear in mind that Britain is unusual in seeing large numbers move out of the inner urban areas. In much of the rest of Europe, cities are popular places in which to live because of planning and the lack of dereliction.
I should have liked to have mentioned the problem of second homes, but I have run out of time. I would say to the Minister: get rid of the council tax discount; look at introducing planning controls, which already exist for offices and should exist for the conversion of family homes into second and holiday homes and, finally, look at the 800,000 empty properties in Britain before planning to build unnecessarily on green-field sites.

Mr. Keith Vaz: The hon. Member for Truro and St. Austell (Mr. Taylor) demonstrates what the Liberal Democrats are so good at—facing in two directions at the same time, supporting the country and the town—but his saving grace is that he does it always with a smile.
I welcome the debate. It is a pity that it has been such a long time since the Conservative party last initiated a debate on planning. I cannot remember, when the Labour party was in opposition and the Conservative party was in government, a passionate devotion to planning in the green belt, but I am glad that we are having the debate. This is the 12th planning debate—Adjournment and otherwise—that I have attended. Under the previous Government, it was usually through an Adjournment procedure that we got to discuss planning.
I am delighted that we have at the Dispatch Box two Ministers who have a grip on the subject, who understand the problems of the planning system and who are so passionately committed to the green belt. I welcome the work that they have done over the past 18 months, and I know that they will continue to produce thoughtful and appropriate policies that will meet the needs of local communities.
I am not surprised that the former Secretary of State for the Environment, the right hon. Member for Suffolk, Coastal (Mr. Gummer), has run away. He came to make a little statement and then left. That is what he did to the planning system and the green belt—he made a few statements, did a few photo calls and then abandoned the system. This was the man who introduced PPG6 and PPG13 during his term in office, two policies that also faced in different directions at the same time. They were criticised by the present vice-chairman of the Conservative party, the hon. Member for Tunbridge Wells (Mr. Norman), in his capacity as the chairman of Asda. I do not know what he is going to say tonight, but I hope that he will repeat some of the criticisms that he had when the Conservative party were in government.
Of course Labour is passionately committed to the green belt and the countryside. It is a very strong commitment, which is why so many Labour Members are present to speak in the debate. The previous Government neglected the green belt and ignored any ideas that could have supported it or our cities.
It is sheer hypocrisy for the shadow spokesman to condemn this Government for what they have done. The Minister was quite right to read out a list of crimes committed by the previous Government against the green belt. It is a list of which the Conservative party should be ashamed. It is hypocritical for Conservatives to pretend that they support the green belt. We know that they have to pretend because most of them are now in marginal seats, and the Liberal Democrats are close to capturing many of those seats. We understand why they say those things—no doubt their local newspapers are also covering the debate—but we have an absolute commitment, reasserted by the Minister, by which we will stand.
I have only a few minutes in which to speak because I know that many colleagues want to contribute to the debate, but I must mention the importance of modernising our planning system and perhaps put a couple of points to the Minister so that he is aware that we support what he has done in respect of planning, but hope that he will take the modernisation procedures forward.
It is important that we examine all the PPGs that have been issued so far. One of the criticisms that I have of the planning system is that there is no firm body of planning law. Those who advise councils and others when applications are made have no consistency. I do not agree with the hon. Member for Truro and St. Austell, who said that the Government should be criticised for not publishing more PPGs. We have had too many PPGs, and the process needs to be streamlined. We need to examine those that have been passed so far and see whether they are consistent. A number of those issued under the previous Government were not, which is why we have the problems that we have.

Mr. Matthew Taylor: I do not disagree with the hon. Gentleman. I think that he missed my point. We need to update PPGs, not add to their number.

Mr. Vaz: If that is what the hon. Gentleman said, I apologise. He is absolutely right. We need to update our PPGs, and that is why I have previously suggested the creation of an advisory committee to advise Ministers and the Government on the inconsistencies in our planning system, especially the PPGs, so that, before they are issued, they can be made consistent with the planning law that goes before them.
The only people who seem to be able to understand the complicated nature of planning law are the planning silks, and we all know how well they do out of the planning system. Why should it be that the only people who benefit from the planning system are the lawyers? I say that as a former lawyer, although not a planning lawyer. The fact that the system is complicated makes matters much worse.
There needs to be consistency and firmness in the system but also flexibility. It is important that developers also know what the present planning system is. Part of the work that the Government have done has been to convince big developers such as the retailers of the importance of developing within city centres. Some of the big supermarkets such as Asda, Tesco, Sainsbury and Safeway understand that, when we say that they have to pass a sequential test, we mean it. We are not going to do what the Conservative Secretary of State did, which was to say that he supported a sequential test but then not follow through. Those developers are told that they ought to develop within city centres and within existing communities. To be fair to them, many have come up with innovative schemes to ensure that there is development within city centres.
When I go home at night, I pass the development on the Finchley road, which has been led by Sainsbury. It has been beneficial because it has brought businesses into the local community, and it is a pleasure to shop in areas of that kind. My hon. Friend the Member for Harrow, East (Mr. McNulty) has left the Chamber, but what Boots has done for the centre of Harrow encourages people to come there. That means that we do not have to have development outside.
We want people to move into our city and town centres, not to move out of them. I see that the right hon. Member for Skipton and Ripon (Mr. Curry), a former Environment Minister, is sitting on the Front Bench. Under the previous Government's policy, it was sad that our town centres were abandoned rather than celebrated. We need investment in our town and city centres so that they are safe places in which to live and work.
Anyone passing Marble Arch and the Edgware road late at night will see exactly the kind of vibrant, inner-city area that we want to see developed. The shops are open quite late into the night; people walk around quite safely; and, although not all the cafes are open in January, the area has the atmosphere of which continental cities are so proud.
Delay is still inherent in the planning system. I know that it was inherited—[Interruption.] It is no good the shadow Minister nodding; it was under the Conservative Government that the backlog developed. Their failure to appoint inspectors and to get planning inquiries moving caused the backlog and delay. We need more inspectors and a more efficient planning inspectorate so that, when applications are turned down, there can be a much quicker resolution of the problem.
I do not know whether any of the Conservative Members present speaks for Hampshire, but, in Mitchell Deva, a community has been under threat for the past five or six years because no one will make a decision as to whether houses can be built in the local area. That causes enormous distress and concern to local people, so let us try to get rid of the delays inherent in the system.
Secondly, the planning system is still very costly, and the only people who can use it are the developers who have a great deal of money. We need to bring the cost down. Some inquiries, such as that into the fifth terminal at Heathrow, go on for years. Despite the enormous cost of the T5 inquiry, we all know what is going to happen in the end. Clearly, local people need to be able to put their case. Perhaps they could be funded through the planning system so that they can get the kind of barristers that some of the big developers use, but let us see an end to those large and long-winded public inquiries.
I welcome the planning role for the regional development agencies. The Minister is right—the regional conferences will enable many of the problems to be dealt with at the regional and local level. That is the way to operate. Instead of having Whitehall dictate what should happen in our regions, local people should work together.
Finally, I commend the work of the urban task force. The Government were right to put someone as eminent as Lord Rogers into the chair of the urban task force. He is one of the foremost architects of this century. He is committed to ensuring that we celebrate our towns and cities. The task force is going to our major towns and cities to take evidence and to listen to the good practice of local Labour councils. That is because all Labour councils have done good work. That having been done, the task force will produce a report that will enable us to have a good urban policy—that is something that we should support.
I look forward to receiving the task force's report because the key to protecting our green belt is to ensure that development occurs on brown-field sites in the cities. It is no longer a question of the bankrupt contest between town and city. The way to resolve these problems is to ensure that we examine ways in which our urban renaissance can be developed so that there will not be development outside urban areas. That is the best way to plan for prosperity and to plan for our people.

Mr. Nicholas Soames: I am grateful to be able to speak tonight solely about West Sussex and to invite the Minister, after what I thought was a deplorable performance from the Government Dispatch Box on such a serious matter, to deal sensibly and seriously with the points that I shall make. I shall speak in the context of the motion tabled by my right hon. Friend the Leader of the Opposition and other right hon. and hon. Friends. I shall focus my remarks on the grave anxieties that are rightly and understandably felt by those who live in my constituency of Mid-Sussex and in West Sussex more generally.
As the Minister may or may not know, West Sussex has some of the most beautiful and romantic landscape in Britain. However, under present Government policy, not one green field is safe in the area. Every settlement feels that it is under pressure. In East Grinstead, Haywards Heath and Burgess Hill, local people are extremely anxious about the Government's monstrous decisions. This is a wholly unacceptable and thoroughly bad state of affairs. It happens also to be environmentally unsustainable.
I shall remind the House of exactly what has happened in West Sussex. I thank my hon. Friend the Member for West Chelmsford (Mr. Burns), who so carefully and sensibly set out the case.

Mr. Bob Blizzard: Will the hon. Gentleman give way?

Mr. Soames: No, I will not.
There is no disagreement in West Sussex, as the Minister knows, that there will have to be development. Mid-Sussex is at the heart of a prosperous, growing and ambitious county. All parties in West Sussex agreed on a structure plan, which was approved by one of Her Majesty's inspectors at an examination in public in May 1997. It was a well-researched, well-documented and careful piece of work by the county, the district and the parish councils. It related to the overall environmental and economic situation in West Sussex.
The Deputy Prime Minister, in what was a monstrous decision, overturned his inspector's report in December 1997. The right hon. Gentleman has imposed, in addition to the 37,800 houses which the county council had agreed to build, 13,000 houses on the county.

Mr. Blizzard: Will the hon. Gentleman give way?

Mr. Soames: No, I will not give way.
The Deputy Prime Minister has ordered West Sussex to ignore his inspector's assessment, and by central Government bully-boy tactics, he has chosen to exceed the environmentally safe capacity of West Sussex. The truth is—the Government have deliberately ignored it—that the infrastructure in Mid-Sussex especially, and in West Sussex more widely, cannot cope with such a level of development.
The new houses will put impossible pressure on schools and social services that are already hard pressed. This will follow on from West Sussex having suffered an appalling local government settlement this year. Equally, there will be impossible pressure on hospitals and roads. Already in


Mid-Sussex I have almost every week a request to visit schools and other facilities where life is made impossible by the burden of traffic and the growth of it around schools, for example, where there are seriously dangerous situations developing.
Central government—even the previous Conservative Government—have not put enough money into roads in West Sussex. The present Government have not only failed to put enough money into roads, they have cut the programme altogether. That flies in the face of other Government policies. I shall quote an answer that was given to me by the Economic Secretary to the Treasury. My question was to be answered on 25 January but the hon. Lady was unable to provide an answer on that day for reasons that I understand. She had to have three extra days to answer it. I asked the Chancellor of the Exchequer
what steps he has taken to encourage an environmentally sustainable economy in Britain.
The Economic Secretary replied:
The Government's approach to sustainable development is based on four broad objectives",
the fourth of which was the
effective protection of the environment and prudent use of natural resources."—[Official Report, 28 January 1999; Vol. 324, c. 349–50.]
If the Minister thinks that the Government are providing effective protection of natural resources and the environment in West Sussex, he is gravely mistaken.
Within the context of the motion, I shall say a word or two about the green belt and its impact. This was the only part of the Minister's speech in which he said something of interest. Much of Surrey and other home counties is designated as metropolitan green belt. The effect of this is to restrict the outward growth of London and to constrain severely the expansion of many of the settlements within the green belt—for example Redhill and Dorking.
Protecting the green belt can and has pushed development pressures into other areas, especially those just beyond the green belt—for example, the northern part of West Sussex where my seat is located, and, among others, Horsham, Crawley and Mid-Sussex. Green fields in those areas, without the protection of green-belt status, accordingly and inevitably come under greater threat from development. The Government are reluctant to extend green belts beyond those areas already designated.
In West Sussex the structure plan policy—that of the structure plan that has not been overturned by the Deputy Prime Ministeraims to protect strongly and forcefully the remaining strategic gaps that are crucial between settlements—for example between Crawley and East Grinstead, Crawley and Horsham and Haywards Heath and Burgess Hill. At present, the Government do not think that such local designations—strategic gaps—should protect land as strongly as national designation such as the green belt and areas of outstanding natural beauty.
I urge the Government to take seriously the request to enable greater protection to be afforded for counties such as West Sussex in the situation that I have described, and to enable greater protection by placing on a par with green belts strategic gaps and other similar local designations. That is vital if the Government are serious about trying to protect the character of areas where pressure for development is at its strongest.
Paragraph 236 of the excellent report of the Select Committee on Environment, Transport and Regional Affairs states:
Environmental protection and sustainable development should be put at the centre of policies on the location of housing.
To my intense sadness and regret, the Government have not done that. No doubt, the previous Government were also seriously at fault. As the Minister rightly said, planning is an extremely difficult matter. However, in terms of the protection of the countryside, West Sussex has suffered what amounts to environmental vandalism. I want the Government to reconsider the consequences of their actions because their steps are, and will continue to be, hugely damaging to the environment.
If the Government persist with what amounts to a gross betrayal of the West Sussex countryside, we must ensure that more is done to improve the design and layout of new developments. I very much agree with one or two points made by the hon. Member for Leicester, East (Mr. Vaz) about the reform of the planning system. I want much tighter designation of architecture, design and layout.
I am delighted that, in June last year, members of the Select Committee visited the Duchy of Cornwall's remarkably interesting project at Poundbury in Dorset. They also visited the millennium village in the Minister's constituency, which is another fine example of new ideas. I hope that the Government will pay attention to the lessons of Poundbury. West Sussex county council officials paid a visit there in November and came away very impressed, as I had been on an earlier trip.
No one is suggesting that all new developments should look like Poundbury—of course they should not—but we need to take on board that what was dismissed as an irrelevance by the know-all practitioners has now been accepted as best practice in the layout and design of new settlements. We must learn that the requirements of environmental quality, layout, architecture and harmony must be much more strictly fulfilled if we are to accept the horrific level of planning that is suggested. Best practice should include thoughtful and sensible principles on planning and architecture. Poundbury has achieved a remarkable success and I hope that the Government and planners will be much tougher on builders about those principles.
I urge the Government to reconsider their actions in West Sussex. Of course there has to be development, but the Deputy Prime Minister's decision to overturn the inspector's report was monstrous and has led to great unhappiness and concern in my constituency.

Mr. Cohn Pickthall: Almost all of my constituency is in the green belt, and that has prevented Greater Manchester from physically merging with Merseyside. That fact alone is sufficient to make me daily bless the vision of those in the post-war Labour Government who made the green belt a reality.
In speaking about my green belt, I speak also about the green belt covered by the constituency of my hon. Friend the Member for South Ribble (Mr. Borrow), which shares the same characteristics and problems. This will be an "on the one hand, but on the other" contribution to the debate because I believe that neither a totally defensive nor a totally 0invasive policy on the green belt is acceptable.
First, it is important to point out that the green belt is not homogenous. It varies in its geological and agricultural characteristics and very much so in its proximity to, or remoteness from, urban settlements. In my part of the world, the green belt is mostly flat peat land and reclaimed marsh. It is mostly AI agricultural land and most of the industry is horticulture and the production of field vegetables of an extremely high quality.
Despite the variety in green-belt characteristics across the country and the different levels of pressures on the green belt in, for example, the south-east around Greater London compared with Lancashire, the underlying purpose of that land is the same. As PPG2 says, that purpose is
to check the unrestricted sprawl of large built up areas and to prevent towns merging; to assist in safeguarding the countryside from encroachment; to preserve the setting and special character of historic towns and to assist in urban regeneration by encouraging the recycling of derelict and other urban land.
It is worth reminding ourselves of those objectives, as it is worth reminding ourselves of the first sentence under "Designation" in PPG2, which says:
The essential characteristic of Green Belts is their permanence.
Within the parameters of what development is allowed in the green belt, land usage is a different matter, and I shall return to that point in a moment.
I want to place on record my deep appreciation for the stout defence of the principles and objectives of the green belt put up by West Lancashire district council and, in particular, the stubborn resistance of the chairman of planning, Bob Pendleton, to the despoliation of the green belt. However, those like myself who have had the good luck to live and work surrounded by the green belt—in my case, for over 30 years—are badly placed to object in principle to the natural desire of those in Liverpool and Manchester to move into the areas that we so much enjoy.
One of the things that worries me about Opposition Members' total concentration on housing and planning in the green belt—I understand their anxieties—is that behind it lies the substratum opinion, "We have got into the green belt, thank you very much; we are all right. Pull up the drawbridge. We do not want anybody else in here with us if we can possibly help it."
My right hon. Friend the Deputy Prime Minister has very properly and crucially yoked, by violence, the preservation of the green belt and green areas generally with the need to upgrade and improve our urban environment. I urge the Government to pursue that relationship relentlessly, and I am sure that they will.
There is more capacity for developing brown-field sites and for living above shops; there are more redundant Ministry of Defence and Department of the Environment, Transport and Regions sites, as well old hospital and old asylum sites to be developed; there is a vast amount of unused Railtrack land. Planning and taxation obstacles to such development possibilities can be adjusted to speed up such acceptable development, while as much development of the green belt as possible is slowed down. My right hon. Friend has proposed a target of 60 per cent.—that has been much debated, so I need not go into it. I believe that that can be achieved, and improved on.

I said at the outset that there are huge differences in land characteristics and usage between green belts. I want to flag up some of the problems faced by my constituents. The survival of economic activity in the rural areas of West Lancashire depends on an intricate and delicate web of interdependence in the horticultural and field vegetable industries. In order to challenge, or to integrate with, the power of major retailers, which I am glad to see are represented in the Chamber, growers must adapt their buildings and become more efficient in transporting their produce. Farmers must adapt their buildings to meet animal welfare needs, among other pressures. Restrictions in green-belt regulations make that process exceedingly difficult and, as my hon. Friend the Member for Leicester, East (Mr. Vaz) said, extremely protracted. It is absurd that local growers and hauliers are often unable simply to park their vehicles on or close to their land because hard-standing counts as building development. Several small growers in my constituency have closed down precisely because of that.
Changing buildings directly to meet the demands of supermarket buyers can also prove so protracted and difficult that contracts are lost. Many local authorities, particularly mine, have been stung by the fiddling of planning permission for so-called agricultural dwellings to the point that they are reluctant to grant any such permission. Absurdly, that has led to them making judgments on the commercial viability of projects—something that local councils are not fitted to do. Constituents of mine are trying to diversify from pig farming—who would not if they had the choice—by buying a redundant plant nursery and bringing it back to life. That nursery is in the green belt and has no dwelling attached to it. The project could well fall through due to obstacles to planning permission in such circumstances.
On the other hand, some of the activities allowed in the green belt are proving to be a different problem. Sprawling golf courses, for which permission is granted because they are part of what is considered acceptable use, sports centres and a proposed crematorium and graveyard in West Lancashire are all as bad an intrusion into agricultural green belt as small factories or extended horticultural units, and certainly as bad as housing development. A proposal to convert a redundant commercial unit in a tiny hamlet into a smithy was turned down because it was deemed not to be agriculture related.
Most problems with residential caravan sites, the creation of new farm roads and alternative use of redundant farm buildings will be common to all green belts, but problems that might be especially acute in horticultural areas require particularly sensitive handling, which is not always enhanced by green-belt regulation. That handling is of course best understood and undertaken locally. I am enthusiastic about the role to be played in this process by regional development agencies. I do not share the fears and cynicism of the Opposition spokesman, the hon. Member for West Chelmsford (Mr. Burns). I very much hope to see elected regional government in the next Parliament which has an overview of such matters.
I am aware that there is a contradiction in what I have said. I have learnt to contradict myself very quickly; it saves my wife the trouble. I have argued the defensive case, which would be strongly in support of the integrity of the green belt, and, at the same time, I am arguing for


more local flexibility—not in terms of the extent of the green belt, but the land usage within it and permissions for that.
Local authorities are much more likely to be able to judge the genuineness of the need or the demand for development, especially in relation to local commercial need as well as housing. Specifically, local authorities are most likely to be able to make sensible judgments about infill in "washed over" villages and hamlets. Remarkably, in Lancashire, surveys of parish need for new homes often produce the information that there is no need, but that never prevents the owners of a large garden or spare plot from conjuring up amazing arguments to prove the need for, or the reasonableness of, what they are doing. As my hon. Friend the Member for Leicester, East said, it is the people with the money who can command the planning silks, who always seem to get their way in the end.
How do we square the contradictory pressures that all hon. Members who represent green-belt areas experience? Whatever else it did not do, the Opposition's chronic over-egging of the case for preservation of the green belt in recent months, which might well have buried the case for its conservation, has brought into the public domain the Government's more detailed ideas about green-belt policy and countryside policy as a whole. Many of us have returned to the Labour party policy document produced before the general election, "A Working Countryside", for which my right hon. Friend the Member for Edinburgh, East and Musselburgh (Dr. Strang) has not had sufficient credit.
For my constituency's green belt, the devil is always in the detail. Given the natural reluctance of a council to get embroiled in lengthy and expensive appeals and wrangling with landowners' barristers, it is easier for the council to say no, full stop. In many cases planning applications are passed to and fro between district and county councils.
Some time ago, I suggested to my local council that one way forward might be to self-impose an absolute limit on the amount of green belt that it would allow even to be considered for suitable development. I envisaged a tiny proportion, perhaps 0.1 per cent., but that would still representing a significant amount of possibilities. That would allow the identification of relatively degraded land, and of unsightly, unused farm buildings, as well as the identification of key small sites for the parking of produce merchants' vehicles, for the erection of small appropriate commercial units and so on.
As things stand, the pressures on industrial and commercial land in Skelmersdale—a new town well inside the green belt—are now such that, this year, the council is planning to release a large tract of land on the edge of the town, formerly designated to come into the planning ambit in six years' time. A more flexible overall policy might have enabled us to avoid that. Although it is good that Skelmersdale is at last starting to grow after years of being trodden on by the previous Government, it is regrettable that it can do so only by spreading into attractive open countryside in what is still the green belt, with the development of an industrial estate.
I am pleased that my right hon. Friends the Ministers are taking green-belt issues seriously and responding to the concerns that my hon. Friends have been expressing for a considerable time. I look forward to the work of

the new RDA for the north-west. I and my north-west colleagues have already had fruitful and encouraging contacts on those issues with Lord Thomas of Macclesfield, the chairman designate.
I commend to my hon. Friend the Under-Secretary the massive amount of work done by my hon. Friend the Member for The Wrekin (Mr. Bradley) in the countryside, and the work done by the Back-Bench rural affairs group, which I trust will inform the debate on the forthcoming rural White Paper. It would be a pity if the Government started re-inventing a wheel that we have already done a good amount of work to fashion.

Mr. James Gray: It is an honour to be called to speak in the debate, not least because I was privileged to serve on the Select Committee on Environment, Transport and Regional Affairs, whose 10th report on housing has been so much discussed and praised this evening. It is also an honour to serve behind the hon. Member for Crewe and Nantwich (Mrs. Dunwoody), who regrettably is not in her place but whose robust views on the subject were clearly laid out in the report, and whose robust views on most subjects go to great lengths to embarrass her own Government. I am always proud to serve behind her, and I am sure that she will be pleased to hear that.
I should tell the Minister for London and Construction that it was not I who described him in that disgraceful way in the Select Committee report. As I was the only Conservative Member serving on the Committee at that time, he must deduce that it was someone from his own side who came to that disgraceful conclusion. On that person's behalf, I apologise for it, although, if one listened to the Minister's speech this evening, one might gain some insight into why that conclusion was reached.
I am pleased to follow the hon. Member for West Lancashire (Mr. Pickthall). I shall have a little to say about the north-west and the north-east of England later in my brief remarks. I know that several hon. Members want to take part in the debate, so I shall try to restrict myself to one specific point about my constituency and two or three general points.
With regard to my constituency, North Wiltshire is threatened by the ever-westward expansion of Swindon. For example, it has recently been decided that 5,000 houses are likely to be built in what is known as the front garden of Swindon, which is in the constituency of the hon. Member for South Swindon (Ms Drown). If that is allowed, it will be a touchstone of the Government's attitude to building. There will be an inexorable growth towards my villages of Lydiard Millicent, Purton and Wootton Bassett, which are terrified that Swindon will encroach upon them and engulf them.
The Secretary of State will no doubt read the report of this debate tomorrow. His attitude the growth of Swindon will be taken as a touchstone in our view of the entire matter when the Opposition—I fear that it will be the Opposition who call it—call the next debate, which will be the fourth that we have called on the subject since we came into opposition.

Ms Julia Drown: I hope that the hon. Gentleman will offer some constructive comments about how we can move forward. Does he agree that one


possible way forward is to examine the density of housing that we should build on brown-field land, and to regenerate our towns, as the Government have outlined?

Mr. Gray: I agree with the hon. Lady. I know that, around Swindon, there are many brown-field sites. I hope that the Secretary of State's strengthening of the rural buffer zone that protects my constituency from Swindon may force developers into the centre of Swindon to develop precisely the kind of sites that the hon. Lady describes.
On a more general point, the Secretary of State seems to be like a rabbit. It may be hard to imagine him as a rabbit, frozen in the headlights of an on-coming Land Rover driven by the developers, but his inaction over the past 12 months suggests that. He simply does not know what to do about the 4.4 million households that we are told that the nation will need between now and 2016. I believe that the latest projections from civil servants may be as high as 5 million households, rather than 4.4 million, as we had all hoped.
As I speak from the Back Benches, and therefore speak with no authority of my party or anyone else, I shall suggest a few ideas to the Secretary of State for dealing with the problem of all those households.
Politicians of all parties go to great lengths to say how much they support the family, how strongly we believe in the family and how we must keep families together, although, in party political debates, we often argue that the Labour party seems less committed to families than we are. None the less, most politicians of most parties go to great lengths to support the nuclear family, and argue that, through taxation and other measures, we must keep the family together.
However, the vast bulk of those 4.4 million households are not nuclear families. We need more and more houses, not because the population is expanding, not because we are all having babies, but because more and more families are breaking up. Most of the 4.4 million homes needed will be for single-parent families. I hold nothing against single-parent families. Nevertheless, it is true that we are talking, not about a growth in the population, but about significant social changes in that population.
Perhaps the nation might like to consider the proposition that, if we restricted the availability of housing, that might encourage more families to stay together, or more youngsters to stay at home for a longer time, or more families to look after the elderly after they have finished living in their own houses.

Barbara Follett: Is it not true that the growth in the number of households is caused by longevity? More people are living longer and they are living alone.

Mr. Gray: That is true; longevity is one of many reasons. However, the growth in the number of single-parent families is a key factor—divorce is causing a rise in the number of households. Even if the hon. Lady is right, my point is that, in the old days, families tended to keep their old folk with them. Allowing an ever-aging population to live alone in large houses is not necessarily the best way of using our diminishing housing stock. We should not build on green-field sites in order to leave

old ladies in the family home where they have always lived—although I respect the fact that they may wish to continue to live there.
The second fundamental issue involves a self-fulfilling prophecy. In areas such as North Wiltshire or Swindon, successful businesses create employment and attract many people to the locality. The businesses then expand—for example, Honda recently announced the creation of an extra 5,000 jobs in Swindon—and someone says, "Gosh, look at all those jobs; we must have more houses to accommodate the employees". Consequently, more businesses locate to the area.
In the meantime, there are 800,000 empty houses in Britain. Some 100,000 of them are in the public sector—they are the responsibility of local authorities, housing associations and other public sector bodies. We are not using 100,000 public sector houses. If asked why that is so, most people would say that it is because the houses are not in the right places. That is correct: those empty houses are not in Swindon. The people who fill the 5,000 jobs with Honda will not live in any of those 800,000 houses because we have no empties in North Wiltshire. I think I am correct in saying—the hon. Member for South Swindon will correct me if I am not—that there are few empties in Swindon. Those empty houses are in the north-east and the north-west—as the hon. Member for West Lancashire pointed out.

Mr. Drew: The hon. Gentleman is talking about the need for an effective regional policy. When he was adviser to the right hon. Member for Suffolk, Coastal (Mr. Gummer), what suggestions did he make with regard to such a policy?

Mr. Gray: The hon. Gentleman may dress it up as effective regional policy, but my point has nothing to do with a top-down regional policy or RDAs saying, "Here is what you guys down there must do." I am talking about restricting the availability of housing in areas such as mine. That will force businesses to locate in the north-east and the north-west of England and people will go to live in those areas and occupy the empty houses. That is a straightforward market-driven approach to solving the problem—it has nothing to do with RDAs, regional policies and all of those things that the Labour party loves.
It is an economic self-fulfilling prophecy that, because the south-west and south-east of England are prosperous, they must be allowed to become even more prosperous and we must allow more and more people to live in those areas. We tell ourselves that, as a nation, we have a duty to provide houses for people where they want them and at prices that they can afford. I suggest that, if we chose to restrict the availability of housing in the south-east and the south-west—as well as in other popular areas—businesses would perhaps locate to where housing is available; where there are empties and brown-field sites.

Mrs. Anne Campbell: In Cambridge, an over-provision of jobs and an under-provision of homes leads to the development of unsustainable policies. People live outside my constituency and drive to work because public transport is poor. That causes huge traffic congestion and air pollution in the city. and that is much less attractive than having more homes that we need in the city.

Mr. Gray: The hon. Lady is absolutely right: that is a very good point. It reminds me that the Minister failed to


answer the question posed by my hon. Friend the Member for South Cambridgeshire (Mr. Lansley) about development around Cambridge. Perhaps the Minister for the Regions, Regeneration and Planning might like to address that issue in his winding-up speech.

Ms Drown: rose—

Mr. Gray: I am concerned that, if I take many more interventions, I may overstay my welcome.
My third general point was also touched on by my hon. Friend the Member for Mid-Sussex (Mr. Soames). We take a curious approach to town planning in this nation. We presume that everyone wants to live on the outskirts of town—the outskirts of Cambridge, for example, as the hon. Member for Cambridge (Mrs. Campbell) has suggested—and in cul-de-sacs, which, for some reason we all love. We also presume that everyone wants to live in two or three-bedroom semi-detached houses with two bathrooms and preferably two garages, but a large number of those 4.4 million households are single-parent families that might well prefer to live in the centre of town and in more densely populated areas, for example in the centre of Swindon, near the railway station, buses and shops.
The presumption that we all want to live in suburban England, down a cul-de-sac, has been challenged most noticeably—as my hon. Friend the Member for Mid-Sussex correctly said—by His Royal Highness the Prince of Wales in his ground-breaking development in Poundbury, which the Select Committee so much enjoyed visiting. That is a truly sustainable development: he has shops, houses and factories, all within walking distance of each other.
That is what town planning ought to be about. It should not necessarily be about huge, useless cul-de-sacs where people need a car to get to the shops, to school or to work. Poundbury gives us some messages and the report goes some length towards saying that we ought to consider carefully some of the lessons to be learned from it.
I hope that it does not take another 12 months for the Secretary of State to make some useful moves forward. As in so many other policy areas, he keeps telling us what he will do, he keeps setting up new bodies and he appoints yet another noble Lord to write a report about something, perhaps a working party or a committee.
I very much hope that it does not take the right hon. Gentleman another 12 months to drop some of that useless rhetoric and start living up to what he has been saying all this time. He should start helping out the people of Devon and the people of Swindon, who are so threatened, as well as the people in the constituency of my hon. Friend the Member for Mid-Sussex and the people of Stevenage. All those people are so threatened by the development that the Secretary of State is allowing to happen.
I call on the Secretary of State to drop the empty rhetoric, drop the committees and drop the working parties and get stuck into turning down some of these disgraceful applications.

Mr. Bob Blizzard: I am pleased that the hon. Member for North Wiltshire (Mr. Gray) is keen on the dispersal of industrial development and prosperity from the wealthier areas to the less prosperous parts of the country, such as my constituency, but I am not convinced that his methods would necessarily work.
At the end of his speech, the hon. Gentleman spoke about rhetoric. The rhetoric that we heard at the beginning of the debate only confirmed my belief that what happened after May 1997 was that the Conservatives woke up. When they had surveyed the wreckage, they realised that virtually all that they had left were their shire heartlands. They thought that they would work on the principle of consolidating what they had and therefore tried to present their party as the party of rural England, and they could only say England.
The Conservatives neglected to notice that there are 175 rural and semi-rural Labour Members of Parliament, which is more than the number of Conservative Members. Since May 1997, our Government have been presented in a series of attacks as the destroyers of the green belt and the despoilers of the countryside. The Conservatives have thrown in a bit about beef on the bone and a bit about fox hunting and have tried to present that as the end of rural life as we know it. That has left the ordinary people who live in the rural areas very cold. Nearly two years on, we can see that those attacks are completely without foundation and that there is no truth in what they allege about the Government.
Those attacks seem to be based on the proposition that the green belt has to be some absolute and that the best way to protect the countryside is to freeze it in time: "Thou shalt not ever build in the countryside." Thus, a hollow argument that is no use at all to those involved in the serious business of trying to plan at local level has developed. I want to show how that highly simplistic approach is pointless and not in the best interests of the countryside and rural people.
I share what I am sure is the view of most hon. Members who are in the Chamber—that it is important to protect the countryside and green belt—but I want to show that real situations are far more complicated than the Opposition have described, by presenting a few examples from my constituency. We all want a sustainable countryside. To achieve that, we must sustain village life. People in my constituency who have lived in villages all their lives tell me that they want some homes in their villages so that their grown-up children can remain there instead of having to move away. There must be some scope for well-thought-out growth in villages to accommodate those people.
Everyone wants to keep village schools, which tie rural communities together. If young people have to move out of villages to towns to find somewhere to live, there will be no children to fill the village schools and they will have to close. It is the same with shops and other services.
Village life needs transport, and the Government are giving many villages a lifeline for the first time. The county of Suffolk, which contains my constituency, has had well over £1 million, and many villages have a bus service for the first time.
If we want a sustainable countryside, we must sustain farming as an industry. Our farmers are challenged by world movements, reform of the common agricultural policy and many other changes. We agree that farmers will have to diversify into other commercial activities, but to do so they may need planning permission, and all too often planning applications are given a blanket refusal. Farmers and country landowners have told me that they want flexibility in the planning system to enable them to continue farming and to operate commercially in the countryside.
We also need to sustain a rural economy and ensure that there is work in the countryside for the people who live there, so that they do not all pile into the constituency of my hon. Friend the Member for Cambridge (Mrs. Campbell). A classic example in my constituency a few years ago was a proposal to turn an old country hall into a brewery. Thankfully, St. Peter's brewery is now a successful, small company—people may have seen its beer in the supermarkets. It had a tremendous planning battle. It was thought that there would be noise, disturbance, smell and light, but in fact it is a good example of a rural enterprise. We need to encourage such ventures, and not require people to overcome so many obstacles.
My constituency is a mixture of urban and rural areas, so we must think of the quality of life in our towns and not just in the countryside. Even with a bottom-up approach, as favoured by the Government, and with brown-field development taking priority, there will have to be some expansion. If we allocate only the minimum amount of land, we get the cramped estates of the past that offer poor living conditions without facilities for the people who live in them. They have only the obligatory little rectangle of grass with a swing in the corner to satisfy planning conditions.
In the recent round of allocations in the local plan, my authority decided that it wanted quality. We allocated more land than was necessary, so the developer was able to acquire and hand over to the public new, large parks and new playing fields. With a little imagination in the planning process, green space is protected for the people.
Government policy on playing fields and open spaces is very strong. Only a few weeks ago, new guidance was issued ensuring that all applications to convert an open space or playing field have to be called in. I know how strict that policy is, because in Bungay in my constituency, the community wants part of a site for a doctor's surgery to serve a vital need. The site is not used as a playing field. People would have liked that planning decision to be made locally, but there has had to be an inquiry. I give that example to show the Government's commitment to protecting open space, and to make a plea for flexibility when doctors' surgeries are at stake.
Some developments are essential, but it is rather unpleasant to live next door to them. For example, we need a sewage disposal plant in my constituency to ensure the bathing quality of our coastal areas, but who wants to live next to a sewage works? Surely the best place for a sewage works is in the countryside, but that counts as development. People who are against all development in the countryside say that such plants cannot be built there, but where do we put them? Anglian Water want to put a plant right next to a village.
All the people in the village of Corton are, rightly, up in arms at the thought of having a sewage works on their doorstep. The place for a sewage works is further out in the countryside where it can be landscaped. In fact, sewage works in the countryside protect it, because nobody would seek to build housing estates in the area.
In East Anglia, the same thing happens with turkey farms. Bernard Matthews has to raise turkeys before he can employ people to turn the turkeys into food. The company adds huge value to the East Anglian economy,

but every time it wants to erect large sheds for the turkeys—they are not battery turkeys, because they can run around—it faces huge opposition because of the smell. However, those sheds are very important for the local economy, so some development in the countryside must be allowed.
We should use brown-field sites first, for both housing and industry. In Lowestoft, the main town in my constituency, there are acres of waterfront land where factories have closed and nothing is happening there. It is important that we regenerate such areas and locate industry there, instead of taking up green fields outside the town for new factories and businesses. However, some external support must be provided to enable development of those brown-field sites. I am pleased that English Partnerships has shown some interest in my area, but it will take a lot of support from Government to achieve regeneration of such areas.
I am pleased that the Rogers task force is compiling a register of sites because, if we are to address the question of the dispersal of industrial activity and prosperity, we must have an oversight of each region or sub-region. If we do not develop brown-field sites in a town that needs development and at the same time allow green-field development in another town some 20 or 30 miles away that has no brown-field sites, we will not use up all the brown-field sites. We must consider that approach to the planning system to ensure that, within a sub-region, all brown-field sites are used up before new green-field sites. That is only a crude way of expressing the issue, but it is one idea for a dispersal mechanism. If we can achieve that, we will have a planning system that stimulates regeneration, instead of standing in its way, and that protects the countryside, in a way that has not been achieved before.

Mr. Archie Norman: I am delighted to speak tonight on an issue that threatens to herald one of the great environmental disasters of the 21st century unless we address the matter early. We are examining changes that are irreversible and it is for that reason that they pose such a great threat. The speech by my hon. Friend the Member for Mid-Sussex (Mr. Soames), who is no longer in his place, illustrated vividly the terrible tragedy that potentially faces West and Mid-Sussex, parts of the countryside that are a national treasure and irreplaceable. His point was not only that we risk losing the countryside, but that, today, communities in that countryside are living under the threat of development. That is a way of setting community against community. The decisions to be made could be regretted by generations to come.
Conservative Members, especially those new to the House, like myself, fully recognise that what we are saying today reflects a change in thinking that is not unique to this side of the House. It is a consequence of the learning that has taken place from the erosion of the countryside in the past two decades. The hon. Member for Leicester, East (Mr. Vaz) raised the question of supermarket development, and I stress that I am not here tonight to speak for the supermarket retailing industry. However, as the hon. Gentleman raised the issue, I would point out that it is important to recognise that the supermarket industry has, for the most part, welcomed the tightening of planning restrictions, which is good for the industry and for the community.
More important, the hon. Member for Leicester, East noted that, as a consequence of that tightening up, market forces have ensured that people in the retailing industry have turned their minds with ingenuity and creativity to solutions using brown-field and town-centre sites. That would not have arisen without the tightening-up under the previous Government. The same analogy should be applied to housing, where tightening up restrictions on green-field sites—not only green belt—will result in the same ingenuity in architecture and development.

Mr. Drew: I have listened carefully to the hon. Gentleman. I would not put words into his mouth, but is he saying on behalf of the companies with which he is associated that they no longer intend to pursue their existing planning permissions outside town centres?

Mr. Norman: I explained that I am not here to speak for the supermarket industry, my interest in which is well known. It would not be appropriate to use the time of the House to pursue that when other hon. Members want to speak.
I want to discuss countryside issues, especially in my constituency, which is a spa town in a part of the country already facing saturation development. There is extreme congestion pressure and pressure on infrastructure such as schools and hospitals. We must recognise that other Government policies, such as the restriction on new road building and the cancellation of the A21 dualling project, have increased the pressure from congestion. Those policies fly in the face of encouraging new housing development, notably the building of 125,000 new homes in Kent.
In his opening remarks, the Minister claimed that the projections for the requirement to build some 4 million new houses are incapable of challenge. We all know that that is not the case. Good evidence on projections was submitted by Professor Glen Bramley to the Environment, Transport and Regional Affairs Committee. He said:
Nevertheless, the household projections have attracted increasing attention and a range of critical comment, some at least of which cannot be lightly dismissed.
No Conservative Member pretends that we do not need to build new houses; we recognise that we do. It is a question of the extent and nature of the new housing developments required.
The assumptions of the new projections are open to question. We must recognise that straight-line projections based on demand such as this are first based on the assumption that we have to meet the demand as it appears; supply has to meet demand without any change in life style being sought, as mentioned my hon. Friend the Member for North Wiltshire (Mr. Gray). We are approaching the point where that form of development is no longer sustainable. Life styles, modes of living, development and architecture will have to adapt accordingly.

Dr. Stephen Ladyman: The hon. Gentleman is a fellow Kent Member. Given what he has said, what did he think when, in 1996, the Tory Government forcibly increased the house-building target in Kent over what Kent county council had wanted?

Mr. Norman: I have already explained that this is today; we are talking about the future and the threat to the countryside now. We fully recognise that some past judgments might not be made in the same situation today.
It is important to recognise that the projections are high risk. They assume the continuity of today's life style. Important assumptions about migration and immigration are made. The requirements of immigrants are particularly important to the hon. Member for South Thanet (Dr. Ladyman). They also assume a continuity of vacancy rates, which run at 4 per cent., as my hon. Friend the Member for North Wiltshire said. A reduction of vacancy rates, compelled partly by market forces, to, say, 2 per cent., would result in 471,000 new homes being taken up, or about 10 per cent. of the total requirement. That shows that the projection is far from sacrosanct.
When the Secretary of State approved 2,500 new homes on green belt in Newcastle, there were already 4,000 empty homes in the Newcastle town centre area. Instead of giving permission for green-belt development, we must apply pressure to encourage architects and developers to find ingenious solutions in town centres. We would thereby solve half of the problem without sacrificing the countryside.
We must recognise the fragility of the projections. They are not certain. No one can predict with any degree of certainty what will be required in 2016. That is why green-belt and green-field developments should come last, not first. We should not give permission for new settlements in the countryside now. If they are required, they should follow on in a decade or so.
My hon. Friend the Member for North Wiltshire also put forward a powerful argument for the nature of the new houses required. The projections do not show that we need hundreds of pastiche, new family houses in the countryside. In fact, 80 per cent. of the new household requirement is for single-person households. As Labour Members said, those include elderly people. Some of the dwellings will perhaps be for single-parent families and some will be for single people and students. Single-person households do not require houses in the countryside or on the edge of towns in green fields. Ideally, they require housing within the existing community. A greater density of housing and a re-configuration of the accommodation will be required in those communities. That is contrary to the effect of the Government's policy on new green-field development. Our best chance is not to give permission now and release land for green-field development, but to oblige developers and architects to find solutions in town centres.
Finally, the cost of green-field developments to the community and the public purse in the long run has an enormous multiplier effect, which is not necessarily the case with developments in towns. What was once a village called Paddock Wood in my constituency is now the major development centre in Tunbridge Wells. Migration into Paddock Wood is not from Tunbridge Wells and the surrounding community and does not consist of single person households. The development is for families moving from London and the Medway towns to Tunbridge Wells and the Kent countryside. The impact is not merely the loss of income-generating families to the Medway towns and the metropolitan conurbation, or the decline in school rolls in the city centre. We will have to build new schools and roads in Paddock Wood and the surrounding area, which will be a cost to the public purse. Green-field development is not merely environmentally destructive: it is a great deal more expensive and it is inappropriate to the requirements of single-person households in the Government's projections.
The Government claim to have moved to a decentralised approach to planning and housing requirements. In so far as that is the intention, it is welcome, but it has not happened. The London and south-east regional planning conference, Serplan, covers an area from Oxford to Folkestone. That is not local or decentralised. Regional is not local or democratic. There is no effective accountability and it is not likely to work.
In conclusion, I urge the Government to hear the plea of all those who are deeply concerned for their communities and the countryside. We recognise that thinking has developed and changed on the issue and we call upon the Government to move with the times so that their actions match the rhetoric. This evening, we have heard heart-felt pleas from Conservative Members and a great deal of eloquence, and not merely from my hon. Friend the Member for Mid-Sussex.We must recognise the risk of permanent destruction of the countryside. We must also recognise that developments proposed for the countryside will not meet future needs and that rethinking is urgently required.

Barbara Follett: I welcome the opportunity to speak in this important debate, to set the record straight on the reasons for the development to the west of Stevenage, and to outline what Hertfordshire county council intends to do to implement its structure plan in a responsible and sustainable fashion.
First, I have to repeat what has already been said: the 4.4 million target figure was a Conservative target figure and Hertfordshire county council was told that it had to provide the space for 65,000 houses by 2016. From 1994, Hertfordshire struggled to do that and it eventually found space for 54,000 houses on brown-field sites in towns and villages, but the problem of space for the remaining 11,000 houses proved intractable.
There was a proposal to build between Royston and Aston, which lie to the east of Stevenage, but that would have merged the two, to their detriment. There were also proposals that we should fill in Fairlands park, which is a recreation park in the centre of Stevenage, and use those few recreation sites we have in an already overcrowded town to provide brown-field sites. Anyone who knows the cost to the social fabric and the other consequences of overcrowding will realise that those were not sustainable options.
Finally, Hertfordshire county council decided reluctantly that it would have to build 1,000 houses in Hemel Hempstead and 10,000 to the west of Stevenage, close to the railway line and the A l(M). Those two developments would take up 800 hectares of green belt. To prevent the concreting over of England and the merging of Hitchin and Luton, Hertfordshire decided to put 5,400 new hectares into the green belt. That is a net gain of 4,600 hectares to the Hertfordshire green belt, which now totals 86,000 hectares. I do not know why Opposition Members think that that is irrelevant.

Mr. Heald: The point is that Hertfordshire had a consultants' report that said that every single one of the 65,000 houses could be provided within the envelopes of towns. Then, Labour-controlled Stevenage borough

council offered to take 10,000 houses. That offer was grasped. Does the hon. Lady agree that, when considering the green belt, it is important to recognise that the land between Hitchin and Luton that is to be designated as green belt is prime agricultural land that is protected anyway?

Mr. Deputy Speaker(Mr. Michael J. Martin): Order. The hon. Gentleman knows that he should not make a speech during an intervention.

Barbara Follett: I shall respond to the hon. Gentleman's point. The reason why Labour-controlled Stevenage council was not keen to have the houses built within the envelopes of towns was that they would be built mainly within the envelope of Stevenage, which is already overcrowded, and on the recreation park that I mentioned.
We hear a lot about 10,000 houses being built to the west of Stevenage. Phase 1, which should be complete by 2011, accounts for only 3,600 houses, and there is the potential for a further 1,400 houses to be built after 2011. There is no certainty that the other 5,000 will be built, but they will be built only if they are needed. I shall outline what Hertfordshire county council wants to do with the development west of Stevenage.
Hertfordshire has a proud history. It is where the first garden cities were developed by Ebenezer Howard—Letchworth in 1903 and Welwyn Garden City in 1919. Through the development west of Stevenage, Hertfordshire wants to build another garden city. Under the garden city 2000 project, the council has conducted a lengthy consultation with local people, especially those who are against the development. Last weekend, at the John Henry Newman school in my constituency, 330 people met for two days to draw the outline plan for the development and to discuss what it could and should contain. I welcome that initiative by Hertfordshire county council, which is exactly what the Government want to encourage, as it involves local people in local plans at an extremely local level. We are putting in place measures to preserve the environment and to ensure that the countryside and the town merge.
I know that Conservatives are as concerned as I am about the erosion of the green belt. I have a great deal of respect for the hon. Member for North-East Hertfordshire (Mr. Heald) and I know that his views are sincere. I shall work with him to do as much as possible to make the new garden city development a good one.
However, we know that the problem is serious. It is predicted that, overall, there will be 23 per cent. more households in Britain by 2016. There will be 29 per cent. more households in the eastern region, where my constituency is situated, and 29 per cent. more in the south-west.

Mr. Blunt: Does the hon. Lady accept that those projections are amenable to change by social and fiscal policies?

Barbara Follett: I do, and I know that the auditor's figures show that the projections can vary by as much as plus or minus 3 per cent. The projections are difficult and not particularly reliable, and, at some stage, we must consider how they can be reformed. However, we have to


work with the figures that we have. I would welcome a more sensible and measured debate about this very emotional and difficult problem. I deplore the mindless and hectoring fashion in which certain Conservative Members—notably the hon. Member for West Chelmsford (Mr. Burns)—introduced the debate. His manner demeaned his office and degraded his argument. I had hoped for better.

Mr. David Curry: It is a pleasure on this guest appearance to see that the Government are fielding such a distinguished team. The Minister for the Regions, Regeneration and Planning apparently has a new role as First Minister for England, while the Minister for London and Construction is a putative but bashful candidate for mayor of London. Such luminaries do not often share the Front Bench to reply to a debate. I have been looking up, in the Evening Standard, all the non-endorsements for the Minister for London and Construction in the campaign that has not yet started on his behalf.
I regret that the Deputy Prime Minister is not present, but I know that he will be extremely familiar with the inner city, because he flies over it so frequently—no doubt on his way to a spot of wealth creation.

Dr. Ladyman: Will the right hon. Gentleman give way?

Mr. Curry: No, not for the moment, although I will later.
The House agrees that, if we are to save the green belt and do our best to ensure that development in the countryside is minimised, we must be serious about developing the inner city. The two go together; they are not options.
If we are to recapture the city and reuse the land, we must do it without starting from the basis of illusion. There is a belief that, if one improves schools and transport in the inner city and makes sure that the streets are safe, people automatically will want to live there. Some will, and doing that much will make it easier for people to live there. However, a strong aspirational element is also at work, as the hon. Member for West Lancashire (Mr. Pickthall) pointed out: people want to move out of such areas because they consider that that will better their condition and, perhaps, their status. That has happened throughout our history, and politicians must be careful before they decide that there is a point at which that process must be brought to an end.
The city must be made to work. A long time ago, I read a book by Jane Jacobs called "The Death and Life of the Great American City". It is one of the great formative books on planning. Her central thesis was that the city had gone wrong because we had started dividing it up into different functions. As a result, we lost much of the cohesion—the informal supervision of people—that obtained in the middle of a city. We had been required to police and manage the city because we had denied the community the ability to police and manage the city itself. If we can get back to some of those concepts in our development, we will save ourselves a great deal of trouble. It is an expensive business, and it would be foolish to pretend that it could be done easily or on

the cheap. Lots of land in cities is contaminated, having had gasworks on it. The Minister for London and Construction represents Greenwich, and he will know better than most the history of munitions and chemicals and the sheer amount of work required to put land right.
We must make sure that we have the right players, playing the right game. The players are the Government, through their regional proposals and their planning rules; the new development agencies which are about to come into existence; the local authorities; housing associations and voluntary groups; and the private sector.
I agreed with much of what was said by the hon. Member for Truro and St. Austell (Mr. Taylor). The figure of 4.4 million hovers over our debate like a dark and threatening cloud. However, that figure reflects what is happening in our society—longevity, divorce, people who have never married. I would love to be able to wish the figure away and to think that it is fundamentally wrong, but all the history suggests that it may be too modest rather than too great. We may be lucky to get away with that figure.
That is an example of how aspirations run up against the needs of the wider community. The devolution of decisions to the regions will not help matters. That does not alter the problem; it merely alters the number of people who can take decisions. The danger is that we are passing the parcel. The places where people want to live and the places where the used land exists do not coincide with all the happy convenience that the Government would wish.
I used to go around the country to find people saying, "Let them live in Liverpool." There was an enormous enthusiasm for living in Liverpool among people who knew that they would never be asked to do so. It is amazing that Liverpool has not been repopulated at colossal speed, given the enthusiasm of people to send others to live there. The hon. Member for West Lancashire has pointed out, however, that some people may actually want to move away from Merseyside, an area that is depopulating.
We must recognise the real problem. The achievement of individual aspiration sometimes comes up against the interest of the community. The whole planning problem is about how we get those two things into sensible equilibrium. The community itself often wants sensitive economic development: people in the area around Cambridge would not want not to have the economic success that has happened there, but it has brought its problems. Planning is about reconciliation, compromise and equilibrium.
At the same time, people have palpable concerns. When people set up home in a new environment, it is natural that they become defensive about it. My hon. Friends the Members for Mid-Sussex (Mr. Soames), for North Wiltshire (Mr. Gray) and for Tunbridge Wells (Mr. Norman) have talked about the sheer sense of permanent uncertainty that surrounds people, and about the sheer length of time it takes before decisions are taken. There is also a sense of despoilation of the very environments to which people move, and the resulting choking of services. Often, the environment that is being quit is not improved, and the environment to which people move is also degraded. That is the worst of both worlds.
The Government can do some things to accelerate the process of making inner cities more developable and livable, an idea that lies at the heart of their argument. We do not have to wait for Lord Rogers to decide.
First, as my hon. Friend the Member for North Wiltshire said, there is the value added tax on house repairs. There is 17.5 per cent. VAT on 800,000 empty homes in England and Wales, but zero VAT on building on green-field sites. Not all those homes are where people want them to be, but they should be coupled with sensible social housing policies in areas such as the north-east. Frankly, there is a persuasive case for stopping building new social housing in Newcastle, given the empties there.
Secondly, housing associations are major players in the city centres and their permitted purposes could be changed to encourage them into regeneration. They should get out of social security, and into economic development, building more houses for the marketplace and for selling. They are in business, they are successful and they bring in private sector funding. They are capable of developing economic regeneration in the cities.
Thirdly, we should see an accelerated programme of housing transfers, perhaps to community trusts. Transfers do not have to go to the private sector or to housing associations. That notion was regarded as scandalous when the previous Government introduced it, but people in Liverpool, Manchester and other places are falling over themselves to have houses transferred because they know that there is no ghost of a chance of the Exchequer providing the public funds that would put those houses in order.
What about allowing local authorities to keep a proportion of the business rate for specific economic regeneration programmes, provided—[Interruption.] I say this knowing that the Government have just said that they do not intend to return it for at least 10 years, because local government has been let off the chain and decanted into its gilded cage by the Government. How about a little bit of business rate for economic regeneration programmes, provided that they are in partnership and provided that they lever in private finance, at least on a one-to-one basis? Then they could keep that bit of extra business rate. When the Government talk about local government's community role, they will be giving it some of the means to deliver that.
How about going further and allowing local authorities to levy a small supplementary rate, with the agreement of business, subject to a ballot, to use for economic regeneration—for surveillance cameras and street improvements?[Interruption.]

Mr. Deputy Speaker: Order. The House must come to order. The right hon. Gentleman is addressing the House. [HON. MEMBERS: "We are enjoying it."' Well, perhaps hon. Members will enjoy the speech in silence.

Mr. Curry: I would hate to have been greeted entirely in silence. I do not mind terribly from which side of House the silence and which side the noise comes.
This is a Government who are supposed to be liberating local government. I am trying to give them one or two hints on how they might manage that. So far, it is all rhetoric and little action, as the hon. Member for

Nottingham, North (Mr. Allen), who is the Government Whip on the Local Government Bill, will be able to testify.
The hon. Member for Leicester, East (Mr. Vaz) was right when he talked about planning delays. They are enormous. It can take more than a year for an inquiry to get under way, even after a call-in. That freezes development comprehensively. The Government have had nearly two years to start getting that right and it is about time that they did so.
If the Government are serious about regeneration—another matter that is also very much part of the DETR's patch—and about local government playing a central role in that, they should revise the local government finance system and its indicators, so that they are less a reflection of the static side of a community and look forward to the dynamic that a community is supposed to be undertaking. At the moment, that is not the case, and local authorities find it difficult, when they really wish to be ambitious—few of them do wish to be ambitious—to carry that through into practice.
The Government need to ensure that education action zones and other such initiatives are co-ordinated with the regeneration programmes so that the right hand knows what the left hand can do. If the Department for Education and Employment can be elbowed, kicking and screaming, into the regional office structure, that would do a lot of good.
The regional development agencies will be in charge of medium-term planning and the regional planning will be on the longer term. Those need to work together. Getting the local authorities and the development agencies on the same side, pushing in the same direction, will not be an easy task. They will have to have a focus. If they try to spread their efforts everywhere, they will do nothing but irritate over a wide area. If they are sensible, they can be effective; but they will have to make difficult choices to do that.
The Government spend much time telling us of their aspirations. They spend a great deal of time setting up one group and another group. Meanwhile, we have hesitation, fragmentation and the total absence of joined-up thinking. Here are some simple measures that the Government could undertake rapidly that would put substance on their aspirations. The Opposition have the aspirations, but for the moment the Government have nothing but empty rhetoric on a subject crucial to masses of British people.

The Minister for the Regions, Regeneration and Planning (Mr. Richard Caborn): The contribution of the right hon. Member for Skipton and Ripon (Mr. Curry) was spoiled at the end. It has been good to listen to him. I do not know how the Opposition passed the hat around this afternoon to determine who would reply to the debate. I hope that what the right hon. Gentleman said will begin to be reflected in Conservative policy. When he was talking about taxation, the hon. Member for Tunbridge Wells (Mr. Norman) went white, because he could see it costing his old business a few bob. When we read Hansard tomorrow, we shall be able to contrast the opening contribution from the hon. Member for West Chelmsford (Mr. Burns), who said that he was initiating the fourth debate on behalf of the Conservatives, with the winding-up speech, and we shall see quite a difference.
To put the record straight, the motion is ill-informed because the regional development agencies will not be involved in land use planning. I am surprised that the right hon. Member for Skipton and Ripon mentioned that. Those agencies are not involved in land use or transport planning; they will be left in the democratic process and will be done through the regional planning guidance.
I shall deal first with the 60 per cent. target in respect of previously developed land. I must tell the Liberal Democrats that we have been systematically examining land use, transport and spatial planning to make sure that, when we publish our proposals, which we will do on PPG 11, PPG12 and PPG3, they will all dovetail and that is exactly what the hon. Member for Truro and St. Austell (Mr. Taylor) was asking for. I assure him that the consultation process, which has been wide and in depth, will ensure, once and for all, that we get it right. We are dealing with some very difficult problems. The Opposition have been playing gesture politics, whereas we are genuinely trying to tackle the structural problems that we inherited from the previous Administration.
Let us go back a few years and consider the arguments deployed by people such as Lord Tebbit, who told people to get on their bikes, come to the south-east and get a job. Well, people did that in the 1970s and 1980s, and there is now tremendous overheating—[Interruption.] The hon. Member for Mid-Sussex (Mr. Soames) went on the rabbit run—or was it the chicken run?—from Crawley. No doubt, he has added to the housing demand there.
We will meet our 60 per cent. target, and we will do so by having, for the first time ever, a land use database. Yes, we will be reflecting on what Lord Rogers is doing in the task force; yes, we will be introducing new regional planning proposals; and yes, we will have land use change statistics. When all that is done, we will not only meet the 60 per cent. target, but go further and make sure that each region has the ability to make sure that happens.
The only way we shall end predict and provide is by putting proper planning practice into operation. We will make sure, through the regional development agencies, that we address the under-utilisation of the economies in many parts of the United Kingdom, and England in particular. Unfortunately, another legacy of the previous Administration is that no English region outside London is performing, in wealth creation terms, to the average of the European regions in respect of gross domestic product per capita. Cornwall in the south-west is down to 69 per cent. of the EU average; Merseyside is down to 72 per cent.; and the whole of the north-east is down to 80 per cent. That economic deficit is the Conservative legacy that we are trying to tackle. It was in part the result of the type of policy pursued by Lord Tebbit when he encouraged people to get on their bikes. We will be following through in terms of those planning guidance documents—

Mr. Lansley: Will the Minister give way?

Mr. Caborn: I shall give way to the hon. Gentleman because I gave him a promise when I spoke previously on these matters.

Mr. Lansley: The Minister is on exactly the right point, and I am grateful to him. He is repeating his speech of 22 October, but not the point where he promised that he

would provide a draft of PPG3 by the time our examination in public was taking place in East Anglia. That examination is occcurring now and the hon. Gentleman has not kept his promise. Where is his draft PPG3? How can the sequential approach be applied to regional planning guidance in the absence of the Government's illustration of what it means?

Mr. Caborn: I can give the hon. Gentleman an answer and offer him an apology that I did not get out a draft PPG3 before the examination in public in the eastern region. The hon. Gentleman has made about the best contribution this evening from the Opposition Benches. That shows the shallowness of the Opposition's arguments. I accept that we have not brought out PPG3. However, I am sure that, when it does come out, the hon. Gentleman will recognise that it dovetails into an area that we have been examining extremely seriously—introducing regional planning guidance that will integrate transport, land use and spatial planning.
The process has proved a little more difficult than I envisaged a few months ago. However, we will get it right. We will ensure that we do not have the mistakes that we had in the past, which were made by previous Administrations. I hope that, in the next few weeks, we shall bring out planning policy guidance notes 11, 12 and 13. As for PPG3, I think that we will be responding positively by giving tools to local authorities to ensure that the sequential test, as embodied in PPG6, is in PPG3 as well. There will be a comprehensive review of that planning, as we promised in "Modernising Planning". We shall also consider how we can factor in the spatial planning perspective that comes from the European Union.

Mr. Matthew Taylor: If the Minister takes the view that the 60 per cent. target for brown-field sites cannot be given over to each individual authority, which it surely cannot, what mechanism will the Government use to ensure that, overall, that target is reached?

Mr. Caborn: As I have said, my right hon. Friend the Deputy Prime Minister gave that commitment, and we are genuinely working towards it. When we came into office, we were amazed, given the previous Conservative Government's rhetoric on brown-field sites, that there was no land use databank to tell us what brown-field sites we had in the United Kingdom. The lack of hard statistical data on which to base any decisions was amazing. Those data were not in the Department. We have had to go systematically through the information that is available and we shall bring that in. We hope that the database will be available to us by the end of March. That will be a starting point. We are thankful to local authorities that have enabled us, through English Partnerships, to make this progress.
The Opposition's motion amounts to hypocrisy. I can tell the House that 50 per cent. of all out-of-town space developed since 1950 was built in only five years—1985 to 1990. I shall finish by setting out the record of the Conservative Administration. During every one of the last years of the decade that the Conservative party was in power, there was a net loss to the green belt. I shall set out the figures in reverse order as is done in Miss World competitions. No. 4, 1989–90, an overall 35 hectares were lost. Who was responsible for that? The answer is the


right hon. Chris Patten. No. 3, 1990–92, 100 hectares were lost. Who was responsible? The answer is the right hon. Member for Henley (Mr. Heseltine). No. 2, 1992–97—[Interruption.] The Opposition can have it whether they like it or not. During 1992–97, 170 hectares of green belt were lost. Who was responsible for that? The answer is the right hon. and learned Member for Folkestone and Hythe (Mr. Howard). No.—

Mr. James Arbuthnot: rose in his place and claimed to move, That the Question be now put.

Question, That the Question be now put, put and agreed to.

Question put accordingly, That the original words stand part of the Question:—

The House divided: Ayes 164, Noes 320.

Division No. 55]
[9.59 pm


AYES


Ainsworth, Peter (E Surrey)
Fabricant, Michael


Allan, Richard
Fallon, Michael


Amess, David
Fearn, Ronnie


Ancram, Rt Hon Michael
Flight, Howard


Arbuthnot, Rt Hon James
Forth, Rt Hon Eric


Ashdown, Rt Hon Paddy
Foster, Don (Bath)


Atkinson, Peter (Hexham)
Fox, Dr Liam


Baker, Norman
Fraser, Christopher


Baldry, Tony
Gale, Roger


Ballard, Jackie
Garnier, Edward


Beith, Rt Hon A J
Gibb, Nick


Bercow, John
Gillan, Mrs Cheryl


Blunt, Crispin
Gorman, Mrs Teresa


Boswell, Tim
Gorrie, Donald


Bottomley, Peter (Worthing W)
Gray, James


Bottomley, Rt Hon Mrs Virginia
Green, Damian


Brady, Graham
Greenway, John


Brake, Tom
Grieve, Dominic


Brazier, Julian
Gummer, Rt Hon John


Brooke, Rt Hon Peter
Hamilton, Rt Hon Sir Archie


Browning, Mrs Angela
Hammond, Philip


Bruce, Ian (S Dorset)
Hawkins, Nick


Burnett, John
Heald, Oliver


Burns, Simon
Heath, David (Somerton & Frome)


Cash, William
Heathcoat-Amory, Rt Hon David


Chapman, Sir Sydney (Chipping Barnet)
Hogg, Rt Hon Douglas



Horam, John


Chidgey, David
Howard, Rt Hon Michael


Chope, Christopher
Hunter, Andrew


Clappison, James
Jack, Rt Hon Michael


Clark, Rt Hon Alan (Kensington)
Jackson, Robert (Wantage)


Clark, Dr Michael (Rayleigh)
Jenkin, Bernard


Clarke, Rt Hon Kenneth (Rushcliffe)
Jones, Nigel (Cheltenham)



Keetch, Paul


Clifton-Brown, Geoffrey
Kennedy, Charles (Ross Skye)


Collins, Tim
Key, Robert


Colvin, Michael
Kirkbride, Miss Julie


Cran, James
Lait, Mrs Jacqui


Curry, Rt Hon David
Lansley, Andrew


Davey, Edward (Kingston)
Leigh, Edward


Davis, Rt Hon David (Haltemprice)
Letwin, Oliver


Day, Stephen
Lewis, Dr Julian (New Forest E)


Donaldson, Jeffrey
Lidington, David


Dorrell, Rt Hon Stephen
Lilley, Rt Hon Peter


Duncan, Alan
Livsey, Richard


Duncan Smith, Iain
Lloyd, Rt Hon Sir Peter (Fareham)


Emery, Rt Hon Sir Peter
Loughton, Tim


Evans, Nigel
MacGregor, Rt Hon John


Faber, David
McIntosh, Miss Anne





MacKay, Rt Hon Andrew
Soames, Nicholas


Maclean, Rt Hon David
Spring, Richard


Maclennan, Rt Hon Robert
Stanley, Rt Hon Sir John


McLoughlin, Patrick
Steen, Anthony


Major, Rt Hon John
Stunell, Andrew


Malins, Humfrey
Swayne, Desmond


Maples, John
Syms, Robert


Mates, Michael
Tapsell, Sir Peter


Maude, Rt Hon Francis
Taylor, John M (Solihull)


Mawhinney, Rt Hon Sir Brian
Taylor, Matthew (Truro)


May, Mrs Theresa
Taylor, Sir Teddy


Moss, Malcolm
Tonge, Dr Jenny


Nicholls, Patrick
Townend, John


Norman, Archie
Tredinnick, David


Oaten, Mark
Trend, Michael


Öpik, Lembit
Tyler, Paul


Ottaway, Richard
Tyrie, Andrew


Page, Richard
Viggers, Peter


Paice, James
Walter, Robert


Paterson, Owen
Wardle, Charles


Pickles, Eric
Waterson, Nigel


Prior, David
Webb, Steve


Randall, John
Wells, Bowen


Redwood, Rt Hon John
Whitney, Sir Raymond


Rendel, David
Whittingdale, John


Robathan, Andrew
Widdecombe, Rt Hon Miss Ann


Robertson, Laurence (Tewk'b'ry)
Wilkinson, John


Roe, Mrs Marion (Broxbourne)
Willetts, David


Ruffley, David
Willis, Phil


Russell, Bob (Colchester)
Wilshire, David


St Aubyn, Nick
Yeo, Tim


Sanders, Adrian
Young, Rt Hon Sir George


Sayeed, Jonathan



Shephard, Rt Hon Mrs Gillian
Tellers for the Ayes:


Shepherd, Richard
Sir David Madel and


Simpson, Keith (Mid-Norfolk)
Mrs. Caroline Spelman.




NOES


Adams, Mrs Irene (Paisley N)
Campbell, Mrs Anne (C'bridge)


Ainger, Nick
Campbell, Ronnie (Blyth V)


Ainsworth, Robert (Cov'try NE)
Campbell-Savours, Dale


Allen, Graham
Canavan, Dennis


Ashton, Joe
Caplin, Ivor


Atherton, Ms Candy
Casale, Roger


Atkins, Charlotte
Cawsey, Ian


Austin, John
Chapman, Ben (Wirral S)


Barnes, Harry
Chisholm, Malcolm


Barron, Kevin
Clapham, Michael


Bayley, Hugh
Clark, Rt Hon Dr David (S Shields)


Beard, Nigel
Clark, Dr Lynda (Edinburgh Pentlands)


Beckett, Rt Hon Mrs Margaret



Begg, Miss Anne
Clark, Paul (Gillingham)


Bell, Martin (Tatton)
Clarke, Charles (Norwich S)


Benn, Rt Hon Tony
Clarke, Tony (Northampton S)


Bennett, Andrew F
Clwyd, Ann


Benton, Joe
Coaker, Vernon


Bermingham, Gerald
Coffey, Ms Ann


Berry, Roger
Cohen, Harry


Best, Harold
Coleman, Iain


Betts, Clive
Colman, Tony


Blears, Ms Hazel
Connarty, Michael


Blizzard, Bob
Corbett, Robin


Blunkett, Rt Hon David
Corbyn, Jeremy


Borrow, David
Corston, Ms Jean


Bradley, Keith (Withington)
Cousins, Jim


Bradley, Peter (The Wrekin)
Cranston, Ross


Bradshaw, Ben
Cryer, Mrs Ann (Keighley)


Brinton, Mrs Helen
Cryer, John (Hornchurch)


Brown, Russell (Dumfries)
Cummings, John


Browne, Desmond
Cunliffe, Lawrence


Buck, Ms Karen
Cunningham, Jim (Cov'try S)


Burden, Richard
Curtis-Thomas, Mrs Claire


Burgon, Colin
Darling, Rt Hon Alistair


Butler, Mrs Christine
Darvill, Keith


Caborn, Richard
Davey, Valerie (Bristol W)


Campbell, Alan (Tynemouth)
Davies, Rt Hon Denzil (Llanelli)






Davies, Geraint (Croydon C)
Johnson, Alan (Hull W & Hassle)


Dawson, Hilton
Johnson, Miss Melanie (Welwyn Hatfield)


Dean, Mrs Janet



Denham, John
Jones, Barry (Alyn & Deeside)


Dismore, Andrew
Jones, Helen (Warrington N)


Dobbin, Jim
Jones, Ms Jenny (Wolverh'ton SW)


Dobson, Rt Hon Frank



Donohoe, Brian H
Jones, Jon Owen (Cardiff C)


Doran, Frank
Jones, Dr Lynne (Selly Oak)


Dowd, Jim
Kaufman, Rt Hon Gerald


Drew, David
Keen, Alan (Feltham & Heston)


Drown, Ms Julia
Keen, Ann (Brentford & Isleworth)


Dunwoody, Mrs Gwyneth
Kelly, Ms Ruth


Eagle, Angela (Wallasey)
Kemp, Fraser


Eagle, Maria (L'pool Garston)
Khabra, Piara S


Efford, Clive
Kidney, David


Ellman, Mrs Louise
Kilfoyle, Peter


Ennis, Jeff
King, Andy (Rugby & Kenilworth)


Etherington, Bill
King, Ms Oona (Bethnal Green)


Field, Rt Hon Frank
Kingham, Ms Tess


Fitzpatrick, Jim
Kumar, Dr Ashok


Fitzsimons, Lorna
Ladyman, Dr Stephen


Flint, Caroline
Lawrence, Ms Jackie


Flynn, Paul
Laxton, Bob


Follett, Barbara
Lepper, David


Foster, Michael Jabez (Hastings)
Leslie, Christopher



Levitt, Tom


Foster, Michael J (Worcester)
Lewis, Ivan (Bury S)


Foulkes, George
Linton, Martin


Fyfe, Maria
Livingstone, Ken


Galloway, George
Lloyd, Tony (Manchester C)


Gardiner, Barry
Lock, David


George, Bruce (Walsall S)
Love, Andrew


Gerrard, Neil
McAllion, John


Gibson, Dr Ian
McAvoy, Thomas


Gilroy, Mrs Linda
McCabe, Steve


Godman, Dr Norman A
McDonagh, Siobhain


Godsiff, Roger
Macdonald, Calum


Goggins, Paul
McDonnell, John


Gordon, Mrs Eileen
McGuire, Mrs Anne


Griffiths, Jane (Reading E)
McIsaac, Shona


Griffiths, Nigel (Edinburgh S)
McKenna, Mrs Rosemary


Griffiths, Win (Bridgend)
Mackinlay, Andrew


Grocott, Bruce
McNulty, Tony


Grogan, John
MacShane, Denis


Gunnell, John
Mactaggart, Fiona


Hain, Peter
McWalter, Tony


Hall, Mike (Weaver Vale)
McWilliam, John


Hanson, David
Mahon, Mrs Alice


Herman, Rt Hon Ms Harriet
Mallaber, Judy


Heal, Mrs Sylvia
Marsden, Gordon (Blackpool S)


Healey, John
Marsden, Paul (Shrewsbury)


Henderson, Ivan (Harwich)
Marshall, David (Shettleston)


Hepburn, Stephen
Marshall, Jim (Leicester S)


Heppell, John
Marshal-Andrews, Robert


Hesford, Stephen
Martlew, Eric


Hill, Keith
Meale, Alan


Hinchliffe, David
Merron, Gillian


Hoey, Kate
Michael, Alun


Home Robertson, John
Michie, Bill (Shef'ld Heeley)



Milburn, Alan


Hoon, Geoffrey
Miller, Andrew


Hope, Phil
Moffatt, Laura


Hopkins, Kelvin
Moonie, Dr Lewis


Howells, Dr Kim
Moran, Ms Margaret


Hoyle, Lindsay
Morley, Elliot


Hughes, Ms Beverley (Stretford)
Morris, Ms Estelle (B'ham Yardley)


Hughes, Kevin (Doncaster N)
Mountford, Kali


Humble, Mrs Joan
Mudie, George


Hurst, Alan
Mullin, Chris


Hutton, John
Murphy, Denis (Wansbeck)


Iddon, Dr Brian
Murphy, Paul (Torfaen)


Illsley, Eric
Naysmith, Dr Doug


Jackson, Ms Glenda (Hampstead)
Norris, Dan


Jamieson, David
O'Brien, Mike (N Warks)


Jenkins, Brian
O'Hara, Eddie





Osborne, Ms Sandra
Snape, Peter


Palmer, Dr Nick
Soley, Clive


Pearson, Ian
Southworth, Ms Helen


Pendry, Tom
Spellar, John


Pickthall, Colin
Starkey, Dr Phyllis


Pike, Peter L
Steinberg, Gerry



Plaskitt, James
Stevenson, George


Pollard, Kerry
Stewart, Ian (Eccles)


Pond, Chris
Stinchcombe, Paul


Pope, Greg
Stoate, Dr Howard


Pound, Stephen
Stott, Roger


Powell, Sir Raymond
Strang, Rt Hon Dr Gavin


Prentice, Ms Bridget (Lewisham E)
Straw, Rt Hon Jack


Prentice, Gordon (Pendle)
Stringer, Graham


Prescott, Rt Hon John
Stuart, Ms Gisela


Primarolo, Dawn
Sutcliffe, Gerry


Prosser, Gwyn
Taylor, Rt Hon Mrs Ann (Dewsbury)


Purchase, Ken



Quinn, Lawrie
Taylor, Ms Dari (Stockton S)


Radice, Giles
Taylor, David (NW Leics)


Rammell, Bill
Thomas, Gareth R (Harrow W)


Rapson, Syd
Timms, Stephen


Raynsford, Nick
Tipping, Paddy


Reed, Andrew (Loughborough)
Touhig, Don


Reid, Rt Hon Dr John (Hamilton N)
Trickett, Jon


Robertson, Rt Hon George (Hamilton S)
Turner, Dennis (Wolverh'hon SE)



Turner, Dr Desmond (Kemptown)


Roche, Mrs Barbara
Turner, Dr George (NW Norfolk)


Rooker, Jeff
Twigg, Derek (Halton)


Rooney, Terry
Vaz, Keith


Ross, Emie (Dundee W)
Vis, Dr Rudi


Rowlands, Ted
Walley, Ms Joan


Ruddock, Ms Joan
Ward, Ms Claire


Russell, Ms Christine (Chester)
Wareing, Robert N


Ryan, Ms Joan
Watts, David


Salter, Martin
Welsh, Andrew


Savidge, Malcolm
White, Brain


Sawford, Phil
Whitehead, Dr Alan


Shaw, Jonathan
Wicks, Malcolm


Sheerman, Barry
Williams, Rt Hon Alan (Swansea W)


Sheldon, Rt Hon Robert
Williams, Alan W (E Carmarthen)


Shipley, Ms Debra
Wills, Michael


Short, Rt Hon Clare
Winterton, Ms Rosie (Doncaster C)


Simpson, Alan (Nottingham S)
Wise, Audrey


Singh, Marsha
Woolas, Phil


Skinner, Dennis
Worthington, Tony


Smith, Rt Hon Andrew (Oxford E)
Wray, James


Smith, Angela (Basildon)
Wyatt, Derek


Smith, Miss Geraldine (Morecambe & Lunesdale)




Tellers for the Noes:


Smith, Jacqui (Redditch)
Jane Kennedy and


Smith, Llew (Blaenau Gwent)
Mr. David Clelland.

Question accordingly negatived.

Question, That the proposed words be there added, put forthwith, pursuant to Standing Order No. 31 (Questions on amendments):—

The House divided: Ayes 318, Noes 160.

Division No. 56]
[10.14 pm


AYES


Adams, Mrs Irene (Paisley N)
Beard, Nigel


Ainger, Nick
Beckett, Rt Hon Mrs Margaret


Ainsworth, Robert (Cov'try NE)
Begg, Miss Anne


Allen, Graham
Bell, Martin (Tatton)


Ashton, Joe
Benn, Rt Hon Tony


Atherton, Ms Candy
Bennett, Andrew F


Atkins, Charlotte
Benton, Joe


Austin, John
Bermingham, Gerald


Barnes, Harry
Berry, Roger


Barron, Kevin
Best, Harold


Bayley, Hugh
Betts, Clive






Blears, Ms Hazel
Efford, Clive


Blizzard, Bob
Ellman, Mrs Louise


Blunkett, Rt Hon David
Ennis, Jeff


Borrow, David
Etherington, Bill


Bradley, Keith (Withington)
Field, Rt Hon Frank


Bradley, Peter (The Wrekin)
Fitzpatrick, Jim



Fitzsimons, Lorna


Bradshaw, Ben
Flint, Caroline


Brinton, Mrs Helen
Flynn, Paul


Brown, Russell (Dumfries)
Follett, Barbara


Browne, Desmond
Foster, Michael Jabez (Hastings)


Buck, Ms Karen
Foster, Michael J (Worcester)


Burden, Richard
Foulkes, George


Burgon, Colin
Fyfe, Maria


Butler, Mrs Christine
Galloway, George


Cable, Dr Vincent
Gardiner, Barry


Campbell, Alan (Tynemouth)
George, Bruce (Walsall S)


Campbell, Mrs Anne (C'bridge)
Gerrard, Neil


Campbell, Ronnie (Blyth V)
Gibson, Dr Ian



Gilroy, Mrs Linda


Campbell-Savours, Dale
Godman, Dr Norman A


Canavan, Dennis
Godsiff, Roger


Cann, Jamie
Goggins, Paul


Caplin, Ivor
Gordon, Mrs Eileen


Casale, Roger
Griffiths, Jane (Reading E)


Cawsey, Ian
Griffiths, Nigel (Edinburgh S)


Chapman, Ben (Wirral S)
Griffiths, Win (Bridgend)


Chisholm, Malcolm
Grocott, Bruce


Clapham, Michael
Grogan, John


Clark, Rt Hon Dr David (S Shields)
Gunnell, John



Hain, Peter


Clark, Dr Lynda (Edinburgh Pentlands)
Hall, Mike (Weaver Vale)



Hanson, David


Clark, Paul (Gillingham)
Harman, Rt Hon Ms Harriet


Clarke, Charles (Norwich S)
Heal, Mrs Sylvia


Clarke, Tony (Northampton S)
Healey, John


Clwyd, Ann
Henderson, Ivan (Harwich)


Coaker, Vernon
Hepburn, Stephen


Coffey, Ms Ann
Heppell, John


Cohen, Harry
Hesfort, Stephen


Coleman, Iain
Hill, Keith


Colman, Tony
Hinchliffe, David


Connarty, Michael
Hoey, Kate


Corbett, Robin
Home Robertson, John


Corbyn, Jeremy
Hoon, Geoffrey


Corston, Ms Jean
Hope, Phil


Cousins, Jim
Hopkins, Kelvin


Cranston, Ross
Howells, Dr Kim



Hoyle, Lindsay


Cryer, Mrs Ann (Keighley)
Hughes, Ms Beverley (Stretford)


Cryer, John (Hornchurch)
Hughes, Kevin (Doncaster N)


Cummings, John
Humble, Mrs Joan


Cunliffe, Lawrence
Hurst, Alan


Cunningham, Jim (Cov'try S)
Hutton, John


Curtis-Thomas, Mrs Claire
Iddon, Dr Brain


Darling, Rt Hon Alistair
Illsley, Eric


Darvill, Keith
Jackson, Ms Glenda (Hampstead)


Davey, Valerie (Bristol W)
Jamieson, David



Jenkins, Brian


Davies, Rt Hon Denzil (Llanelli)
Johnson, Alan (Hull W & Hessle)


Davies, Geraint (Croydon C)
Johnson, Miss Melanie (Welwyn Hatfield)


Dawson, Hilton



Dean, Mrs Janet
Jones, Barry (Alyn & Deeside)


Denham, John
Jones, Helen (Warrington N)


Dismore, Andrew
Jones, Ms Jenny (Wolverh'ton SW)


Dobbin, Jim



Dobson, Rt Hon Frank
Jones, Jon Owen (Cardiff C)


Donohoe, Brian H
Jones, Dr Lynne (Selly Oak)


Doran, Frank
Kaufman, Rt Hon Gerald


Dowd, Jim
Keen, Alan (Feltham & Heston)


Drew, David
Keen, Ann (Brentford & Isleworth)


Drown, Ms Julia
Kelly, Ms Ruth



Kemp, Fraser


Dunwoody, Mrs Gwyneth
Khabra, Piara S


Eagle, Angela (Wallasey)
Kidney, David


Eagle, Maria (L'pool Garston)
Kilfoyle, Peter





King, Andy (Rugby & Kenilworth)
Quinn, Lawrie


King, Ms Oona (Bethnal Green)
Radice, Giles


Kingham, Ms Tess
Rammell, Bill


Kumar, Dr Ashok
Rapson, Syd


Ladyman, Dr Stephen
Raynsford, Nick


Lawrence, Ms Jackie
Reed, Andrew (Loughborough)


Laxton, Bob
Reid, Rt Hon Dr John (Hamilton N)


Lepper, David
Robertson, Rt Hon George (Hamilton S)


Leslie, Christopher



Levitt, Tom
Roche, Mrs Barbara


Lewis, Ivan (Bury S)
Rooker, Jeff


Linton, Martin
Rooney, Terry


Livingstone, Ken
Ross, Emie (Dundee W)


Lloyd, Tony (Manchester C)
Rowlands, Ted


Lock, David
Ruddock, Ms Joan


Love, Andrew
Russell, Ms Christine (Chester)


McAllion, John
Ryan, Ms Joan


McAvoy, Thomas
Savidge, Malcolm


McCabe, Steve
Sawford, Phil


McDonagh, Siobhain
Shaw, Jonathan


Macdonald, Calum
Sheerman, Barry


McDonnell, John
Sheldon, Rt Hon Robert


McGuire, Mrs Anne
Shipley, Ms Debra


McIsaac, Shona
Simpson, Alan (Nottingham S)


McKenna, Mrs Rosemary
Singh, Marsha


Mackinlay, Andrew
Skinner, Dennis


McNulty, Tony
Smith, Rt Hon Andrew (Oxford E)


MacShane, Denis
Smith, Angela (Basildon)


Mactaggart, Fiona
Smith, Miss Geraldine (Morecambe & Lunesdale)


McWalter, Tony



McWilliam, John
Smith, Jacqui (Redditch)


Mahon, Mrs Alice
Smith, Llew (Blaenau Gwent)


Mallaber, Judy
Snape, Peter


Marsden, Gordon (Blackpool S)
Soley, Clive


Marsden, Paul (Shrewsbury)
Southworth, Ms Helen


Marshall, David (Shettleston)
Spellar, John


Marshall, Jim (Leicester S)
Starkey, Dr Phyllis


Marshall-Andrews, Robert
Steinberg, Gerry


Martlew, Eric
Stevenson, George


Meale, Alan
Stewart, Ian (Eccles)


Merron, Gillian
Stinchcombe, Paul


Michael, Alun
Stoate, Dr Howard


Michie, Bill (Shef'ld Heeley)
Stott, Roger


Milburn, Alan
Strang, Rt Hon Dr Gavin


Miller, Andrew
Straw, Rt Hon Jack


Moffatt, Laura
Stringer, Graham


Moonie, Dr Lewis
Stuart, Ms Gisela


Moran, Ms Margaret
Sutcliffe, Gerry


Morley, Elliot
Taylor, Rt Hon Mrs Ann (Dewsbury)


Morris, Ms Estelle (B'ham Yardley)



Mountford, Kali
Taylor, Ms Dari (Stockton S)


Mudie, George
Taylor, David (NW Leics)


Mullin, Chris
Thomas, Gareth R (Harrow W)


Murphy, Denis (Wansbeck)
Timms, Stephen


Murphy, Paul (Torfaen)
Tipping, Paddy


Naysmith, Dr Doug
Touhig, Don


Norris, Dan
Trickett, Jon


O'Brien, Mike (N Warks)
Turner, Dennis (Wolverh'ton SE)


O'Hara, Eddie
Turner, Dr Desmond (Kemptown)


Osborne, Ms Sandra
Turner, Dr George (NW Norfolk)


Palmer, Dr Nick
Twigg, Derek (Halton)


Pearson, Ian
Vaz, Keith


Pickthall, Colin
Vis, Dr Rudi


Pike, Peter L
Walley, Ms Joan


Plaskitt, James
Ward, Ms Claire


Pollard, Kerry
Wareing, Robert N


Pond, Chris
Watts, David


Pope, Greg
Welsh, Andrew


Pound, Stephen
White, Brian


Powell, Sir Raymond
Whitehead, Dr Alan


Prentice, Ms Bridget (Lewisham E)
Wicks, Malcolm


Prentice, Gordon (Pendle)
Williams, Rt Hon Alan (Swansea W)


Prescott, Rt Hon John



Primarolo, Dawn
Williams, Alan W (E Carmarthen)


Prosser, Gwyn
Wills, Michael


Purchase, Ken
Winterton, Ms Rosie (Doncaster C)






Wise Audrey
Tellers for the Ayes:


Woolas, Phil



Worthington, Tony
Mr. David Clelland and


Wray, James



Wyatt, Derek
Jane Kennedy.




NOES


Ainsworth, Peter (E Surrey)
Green, Damian


Allan, Richard
Greenway, John


Amess, David
Grieve, Dominic


Ancram, Rt Hon Michael
Gummer, Rt Hon John


Arbuthnot, Rt Hon James
Hamilton, Rt Hon Sir Archie


Ashdown, Rt Hon Paddy
Hammond, Philip


Atkinson, Peter (Hexham)
Heald, Oliver


Baker, Norman
Heath, David (Somerton & Frome)


Baldry, Tony
Heathcoat-Amory, Rt Hon David


Ballard, Jackie
Hogg, Rt Hon Douglas


Beith, Rt Hon A J
Horam, John


Bercow, John
Howard, Rt Hon Michael


Blunt, Crispin
Hughes, Simon (Southward N)


Boswell, Tim
Hunter, Andrew


Bottomley, Peter (Worthing W)
Jack, Rt Hon Michael


Bottomley, Rt Hon Mrs Virginia
Jackson, Robert (Wantage)


Brady, Graham
Jenkin, Bernard


Brake, Tom
Jones, Nigel (Cheltenham)


Brazier, Julian
Keetch, Paul


Brooke, Rt Hon Peter
Kennedy, Charles (Ross Skye)


Browning, Mrs Angela
Key, Robert


Bruce, Ian (S Dorset)
Kirkbride, Miss Julie


Burnett, John
Lait, Mrs Jacqui


Burns, Simon
Lansley, Andrew


Cash, William
Leigh, Edward


Chapman, Sir Sydney (Chipping Barnet)
Letwin, Oliver



Lewis, Dr Julian (New Forest E)


Chidgey, David
Lidington, David


Chope, Christopher
Lilley, Rt Hon Peter


Clappison, James
Livsey, Richard


Clark, Dr Michael (Rayleigh)
Lloyd, Rt Hon Sir Peter (Fareham)


Clarke, Rt Hon Kenneth (Rushcliffe)
Loughton, Tim



MacGregor, Rt Hon John


Clifton-Brown, Geoffrey
McIntosh, Miss Anne


Collins, Tim
Maclean, Rt Hon David


Colvin, Michael
Maclennan, Rt Hon Robert


Cran, James
McLoughlin, Patrick


Curry, Rt Hon David
Major, Rt Hon John


Davey, Edward (Kingston)
Malins, Humfrey


Davis, Rt Hon David (Haltemprice)
Maples, John


Day, Stephen
Mates, Michael


Donaldson, Jeffrey
Maude, Rt Hon Francis


Dorrell, Rt Hon Stephen
Mawhinney, Rt Hon Sir Brian


Duncan, Alan
May, Mrs Theresa


Duncan Smith, Iain
Moss, Malcolm


Emery, Rt Hon Sir Peter
Nicholls, Patrick


Evans, Nigel
Norman, Archie


Faber, David
Oaten, Mark


Fabricant, Michael
Öpik, Lembit


Fallon, Michael
Ottaway, Richard


Fearn, Ronnie
Paice, James


Flight, Howard
Paterson, Owen


Forth, Rt Hon Eric
Pickles, Eric


Foster, Don (Bath)
Prior, David


Fox, Dr Liam
Randall, John


Fraser, Christopher
Redwood, Rt Hon John


Gale, Roger
Rendel, David


Garnier, Edward
Robathan, Andrew


Gibb, Nick
Robertson, Laurence (Tewk'b'ry)


Gillan, Mrs Cheryl
Roe, Mrs Marion (Broxbourne)


Gorman, Mrs Teresa
Ruffley, David


Gorrie, Donald
Russell, Bob (Colchester)


Gray, James
St Aubyn, Nick





Sanders, Adrian
Tyrie, Andrew


Sayeed, Jonathan
Viggers, Peter


Shephard, Rt Hon Mrs Gillian
Walter, Robert


Simpson, Keith (Mid-Norfolk)
Wardle, Charles


Soames, Nicholas
Waterson, Nigel


Spring, Richard
Webb, Steve


Stanley, Rt Hon Sir John
Wells, Bowen


Steen, Anthony
Whitney, Sir Raymond


Stunell, Andrew
Whittingdale, John


Swayne, Desmond
Widdecombe, Rt Hon Miss Ann


Syms, Robert
Wilkinson, John


Tapsell, Sir Peter
Willetts, David


Taylor, John M (Solihull)
Willis, Phil


Taylor, Matthew (Truro)
Wilshire, David


Taylor, Sir Teddy
Yeo, Tim


Tonge, Dr Jenny
Young, Rt Hon Sir George


Townend, John



Tredinnick, David
Tellers for the Noes:


Trend, Michael
Sir David Madel and


Tyler, Paul
Mrs. Caroline Spelman.

Question accordingly agreed to.

MR. DEPUTY SPEAKER forthwith declared the main Question, as amended, to be agreed to.

Resolved,
That this House welcomes the Government's continued commitment to protecting the countryside, including green belts, and promoting sustainable regeneration in towns and cities; recognises that the Government's decentralised and integrated policy approach, as stated in Planning for Communities of the Future, Modernising the Planning System and A New Deal for Transport, is helping to achieve more sustainable and equitable patterns of urban and rural development; welcomes the Government's commitment strictly to control development in the open countryside and to increase the proportion of new housing on previously—developed land in urban areas, smaller towns and villages from 40 per cent in the mid-1980s to 60 per cent; recognises the need to replace the previous predict and provide approach to the issue of household growth with a more flexible decentralised system, involving realistic regional targets for the building of new homes on recycled land, tighter controls on urban sprawl, new regional and housing planning guidance to ensure the adoption of sustainable solutions to housing development and more rigorous and detailed assessment of land availability; and believes that the Government's inter-linked policies for urban regeneration and protection of the countryside will enhance the quality of life for people in both rural and urban areas.

DELEGATED LEGISLATION

Mr. Deputy Speaker (Mr. Michael J. Martin): With permission, I shall put together the motions relating to delegated legislation.

Motion made, and Question put forthwith, pursuant to Standing Order No. 118(6) (Standing Committees on Delegated Legislation),

EUROPEAN COMMUNITIES

That the draft European Communities (Definition of Treaties) (North-East Atlantic Fisheries Commission) Order 1999, which was laid before this House on 11th January, be approved.

That the draft European Communities (Immunities and Privileges of the North-East Atlantic Fisheries Commission) Order 1999, which was laid before this House on 11th January, be approved.—[Mr. Hanson.]

Question agreed to.

PETITION

Hospitalfield, Arbroath

Mr. Andrew Welsh: I am presenting this petition on behalf of the Hospitalfield area residents committee and the residents of the Hospitalfield housing estate in Arbroath, who wish to protest against the environmental problems with which they have been confronted over many years and seek action from the Government to investigate, cure and solve those problems. The petition is signed by members of the Hospitalfield area residents committee—Mr. and Mrs. Wright, Mr. and Mrs. Dear, Mr. Bill Kerr and Mrs. Meldrum—and has the backing of 688 members of the wider local community.
The petition reads:
The Petitioners therefore request that the House of Commons urge the Secretary of State for Scotland

(1) to take whatever steps may be necessary to stop this pollution from continuing, and
(2) to ensure that an investigation takes place into how this situation came about and into why it has been allowed to continue for more than two and a half years.

And the Petitioners remain, etc.

To lie upon the Table.

Education Services (Somerset)

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Hanson.]

Mr. David Heath: I am extremely pleased to have the opportunity to address the House on the important issue of education services in Somerset and their funding. I confess to a sense of deja vu, in two respects. I seem to have secured a number of Adjournment debates on the subject during the brief time that I have been a Member of this place. My first Adjournment debate—on 12 June 1997, in which I made my second speech in the Chamber—was on exactly the same subject.
I make no apology for that, because, sadly, the points that I made then are still as relevant today. Although I may sometimes be a little bored of making the same points—the Minister may be bored of hearing them, from me and others—that is nothing against the annual anguish of councillors, governors, teachers and parents, who wrestle with budgets that simply do not work.
If I wanted evidence of that, I should have only to read the letters that have been sent again by schools up and down my constituency, from Huish Episcopi school; Milborne Port county primary; Sexey's school, which is a grant-maintained school making the same point; Nunney county first; Countess Gytha school in Queen Camel. A letter has also come from Berkley parish council, and all those letters make the same point: the present funding arrangements for Somerset do not work.
I also feel a sense of deja vu because we had a near-identical debate only two weeks ago in the Chamber, initiated by my hon. Friend the Member for Northavon (Mr. Webb). It was an excellent debate, with very much the same cast of characters: the same Minister and the same hon. Members on this side of the Chamber. The west country mafia was spread around both sides of the House—

Mr. Bob Russell: And not a Tory in sight.

Mr. Heath: My hon. Friend is absolutely correct.
My modest request to the Minister is that her civil servants provide her with a slightly different brief this evening, not simply one with South Gloucestershire crossed out and Somerset put in.
What is the problem? It is simply that the revenue support system does not come close to providing sufficient to enable Somerset county council to provide school services at the level that I, and the Minister, would want. That is not unique to Somerset; it appears to be the case for almost all authorities in the rural south-west. That is a significant problem.

Mr. Adrian Sanders: I gave my hon. Friend notice that I should like to intervene.
Is not that problem compounded by areas, such as my constituency, that have rising numbers of pupils which are not reflected in the standard spending assessment totals? That is obviously a problem in Somerset, as it is in South


Gloucestershire, and the sums of money that come from the Government lag behind the expenditure of the schools concerned.

Mr. Heath: I am grateful to my honourable and elegant Friend for that intervention. He is absolutely right, and the point was amplified by my hon. Friend the Member for Northavon in the recent debate.
The Department for Education and Employment admits that Somerset is hard done by. I had a meeting with the Secretary of State, who freely admitted that, when in opposition, he used to quote the Somerset factor in evidence. The sparsity factor and the other factors used to derive the formula work to the disadvantage of a small number of authorities spread around the country, particularly in the south-west of England.
I have a letter to one of my constituents from Mr. Niall Forde, a civil servant in the Department, who says:
Ministers recognise that historically there has been a very real difficulty for Somerset, because of under-funding over many years.
This is not a recent phenomenon: it has gone on year after year. It was a problem when I became leader of the county council in 1985, and it has been a problem ever since.
What has been Somerset's response to that problem over the years? It has provided more money from local resources. It has massively topped up the amount that the Government provide for education from other resources available to it. That has averaged £10 million a year over and above the standard spending assessment, which is £40 million from local funds in the past four years. I do not take the SSA as an adequate measure of what should be spent, but nevertheless it is what the Government officially say should be spent on education. That £40 million has not come out of thin air: it has come from the budgets for highways, social services and other essential services provided by the county council.
I fully accept that the Government's generosity has increased this year. They have recognised that there is a problem with overall education funding, and they have sought to respond. Indeed, there is an increase in the education SSA for Somerset of £10.6 million for next year, and that is very welcome. On the face of it, that should be very good news, but—and it is a big but—sadly, that increase merely brings the SSA up to fractionally more than the real expenditure this year. That is the constant funding trap in which authorities that spend massively over their SSA year on year find themselves.
The total expenditure increase for the authority is £15.5 million. If the authority spends that much, it will increase its council tax by 6.4 per cent. We are told that the Government's view is that the increase should be 4.5 per cent., so immediately there is a discrepancy between the two.
It would be wrong for me to expect the Minister to be an expert in this area, but she should know that the county council has other commitments apart from education. It has non-service commitments—£6 million comes out of the extra money for items such as landfill tax and land drainage. If the Minister saw the water levels in Somerset at the moment, she would realise how important land drainage is in that area. We have a serious problem.
What is wrong with the system as it stands? The area cost adjustment is often referred to as the tax on the west, although it could just as easily be described as the tax on

the north or the tax on the midlands. It is the tax on those areas that are not in the south-east and do not have the benefit of the adjustment.
The Government's view has always been that they would like to change the area cost adjustment, but they cannot get unanimity among local authorities. Of course they will not get unanimity among local authorities. I was a leading member of the Association of County Councils for years, and I could not get unanimity in the association, because those who represented Sussex, Hampshire and the other authorities that benefited from the area cost adjustment were not going meekly to say that they would give it up. The fact is that it is wrong and is based on a wrong methodology, and it must be removed. It is worth £2.2 million to Somerset in terms of its education expenditure.
There are other factors in the education formula, such as pupil weighting, which is worth £3 million in Somerset, and additional educational needs, which is worth £5.7 million. So £8.7 million is missing from the Somerset education budget simply because of the perverse effect of the methodology used for those formulae.
The problem is that Ministers say that they cannot obtain unanimity, but they will never do so on such matters because losers will not happily accept that they should be losers. It is central Government's job to decide what is equitable and the present situation is patently not equitable. Other factors also have an effect. For example, in a rural county such as Somerset with many small village schools, the unit costs of providing the same level of education are inevitably higher.

Jackie Ballard: Is my hon. Friend aware that the chairman of governors at Cheddon Fitzpaine primary school in my constituency resigned this week? It is a very successful school and she has been the chair of governors for 10 years, but she resigned because of the twin pressures of budget difficulties continuing year after year and the extra innovations that the Government have loaded on to schools. The school will find it difficult to find anyone to replace her and many areas have a shortage of people willing to become governors.

Mr. Heath: My hon. Friend is right. I know the lady in question and I know the value of her service to that school. My wife is a governor of a small rural school and my children attend such schools. They face difficulties because people are fed up of wrestling with budgets time after time.
The effect of more pupils in Somerset has already been mentioned, but this year it will cost an extra £1.5 million simply to accommodate the extra pupils on the rolls. Also, every 1 per cent. of the teachers' pay awards that is not budgeted for in the Government's figures costs Somerset another £800,000 to £900,000. The county council is, of course, able to operate expediencies. It can continue to spend in excess of its SSA on education, as it has for the past 10 years. However, it may face capping, whether it is crude and universal or secretive and targeted. Whichever it is, it still exists.
The county council also faces the problems caused by increasing the council tax—an increase that many in rural areas cannot afford. Then there is the effect on other services. I have mentioned social services and I worry greatly that Somerset spends below its SSA on


social services. That is an essential part of the council's work, but it reduces spending on it to meet the needs of the education budget. The council also faces the lack of real improvement in standards in schools, which the Minister would love to see. Of course, the non-school services are also constantly being squeezed.
The Government's actions, including the introduction of a three-year stability programme, should ameliorate the situation. However, if they dip the present formula in aspic and use it for the next three years, they will do counties such as Somerset no favours because all that will do is maintain an unfair position. In reply to my hon. Friend the Member for Northavon in his recent Adjournment debate, the Minister suggested that the additional funds might provide a valuable mechanism for rectifying some of the faults in the system. However, although Somerset is very pleased about the result of its bid to the standards fund, that extra funding has to be matched. If an authority has not got the spare cash to match that funding, it has to take it out of the already allocated schools budget. The authority is in a cleft stick, because it can only improve one area to the detriment of another.
The money for the reduction of class sizes is also good news and I welcome it. The Government are doing a tremendous job, but if class sizes are reduced at the bottom end of schools by improving the funding of primary schools, any cuts in services must be concentrated on the middle and secondary schools, which also cannot afford any reductions.
I hope that it is common ground between the Minister and myself that the quality of education in Somerset is extremely good. I hope that she also recognises that the local authority has shown its commitment year after year to making education its priority. It displays a high degree of efficiency and effectiveness in its administration and delegates a high proportion of its spending to its schools. The fact remains that the SSA per pupil is well below the national average. Compared to some of the London authorities, it is £1,000 per pupil lower. I cannot accept that for my children or my constituents' children. I cannot accept that they are second-class pupils because they happen to live in Somerset and to benefit from its countryside. The Government must demonstrate their commitment to extending what they are saying and doing in education overall to every part of the country. At present, the formula prevents that.
I am sick and tired of bringing this case to Government each year. I did it as leader of the council, as chairman of education, for the county council and now I do it as a Member of Parliament. It is the same case year after year because it is the same problem year after year. I do not want the chairs of governors, governing bodies, head teachers and parents to go through the same ritual year after year of writing letters and applying pressure to the Department for Education and Employment when the fact is that the formula is wrong and needs changing. I invite the Minister to put what pressure she can on the Department of the Environment, Transport and the Regions to ensure that, next year, Somerset has the funding that it deserves to run its schools as they should be run.

The Minister for School Standards (Ms Estelle Morris): I congratulate the hon. Member for Somerton and Frome (Mr. Heath) on securing this debate. It is a little like deja vu because the hon. Member for Northavon (Mr. Webb) had a similar debate a week ago. I will try not to be too repetitive but I hope that the hon. Member for Somerton and Frome understands that the explanation that I gave his colleague is very much the one that I will give him, but I will tailor it to suit Somerset.
The hon. Member for Somerton and Frome described this as a south-west problem, but it is not. I hear about the problem that we inherited on how standard spending assessments are worked out wherever I go. In the west midlands, where my constituency lies, people from Staffordshire and Derbyshire speak with the same feeling as people from Somerset. In my travels, I have not yet met anyone who said how generously they are funded by SSA and called for the longed-for review. I suspect that I am in for a spate of Adjournment debates over the next few weeks as hon. Members rightly secure debates on their education settlements. I look forward to the first Member who joins us in claiming that a review of SSAs is long overdue but says that his or her area receives too much. That is the difficulty.
I am delighted to be able to respond to one of the points raised by the hon. Member for Somerton and Frome. I congratulate those in Somerset and his constituency on the standards of education. They achieve above the national level: 51 per cent. of Somerset pupils obtain five or more GCSEs at grades A to C. Key stage 2 tests show 67 per cent. of pupils achieving better than the national average. The same is true at each key stage. Such achievement is not brought about without much hard work, I extend my thanks and congratulations. I extend them also to local authorities in Somerset that have made the difficult decision to spend more than their education SSA because, as a constituency Member, I know the consequences for other services. I am happy to oblige the hon. Gentleman on both points.
I disagree with the hon. Member for Somerton and Frome on one matter. I understand his frustration in all the different guises of his relationship with Somerset, as parent, governor, councillor and Member of Parliament. I understand his frustration with repeating the same argument in different forums year after year but this is our second year of being answerable for that. It was a different Government with different priorities that answered previous queries. I understand his frustration but I am answerable only for our actions over the past 18 months.
I want to put the matter in the context of the increased funding that there has been. I am sorry that a chair of governors decided to resign because we need good quality people in such positions. In thanking that person for their years of service, I wonder whether a review of that decision might be appropriate. Year after year, governing bodies have had to struggle with reduced budgets. It is ironic that, in the first year that we are getting really expanded budgets, high—calibre chairs of governors should choose to resign. I make that point to the constituent of the hon. Member for Taunton (Jackie Ballard). Such people know the national context in which we are operating, with a doubling of capital funding between now and 2002 and an average £10 billion increase over the next three years in money going to local authorities.


That money was already going to come through next year, and the hon. Gentleman was kind enough to acknowledge that. Whereas, nationally, SSAs will increase by 5.7 per cent., the SSA for his area will increase by 6.5 per cent. I realise that the extra is to account for increased numbers, even if they were counted 18 months ago, so I do not pretend that it is an effort to remedy the SSA.
I was also pleased that the hon. Gentleman acknowledged that, where we have the power to bring more money into schools without changing the SSA, we have done so. He cannot claim as much sorrow as his hon. Friend the Member for Northavon, whose authority is bottom of the table. Sadly, that is not a position on which any hon. Members would pride themselves. The hon. Member for Somerton and Frome represents an area that is certainly in the bottom half as regards SSA. I think that 29 local authorities have SSAs that make them worse off and have more cause to complain than the hon. Gentleman, but I am not trying to justify that, to make light of the load or to say that he ought to feel better.
This year, we have managed to increase the standards fund to Somerset by about 70 per cent. above our increase in funding last year. The Government's authority receives the national average when it comes to allocation of standards funding. Although I certainly accept the argument that it is receiving less SSA than he and his constituents have a right to expect, I assure him that, where we have been able to act within the formula, we have not treated Somerset less favourably than other local authorities. I hope that his constituents and the chairs of governors, who rightly worry about that, realise and acknowledge that fact. Somerset received £378,000 so that it could begin to implement class size policy early. Of course, that is not matched money—it is 100 per cent. from the standards fund.
There will be other initiatives. The hon. Gentleman is concerned about a school in his constituency that has a class of 38. I am considering a petition, which he presented to the House, and I will be in a position to reply to his constituents shortly. I understand that it is not a key stage 1 class, otherwise it would be dealt with. I hope that he will accept that the 20,000 classroom assistants, who will be funded through the standards fund, will be the sort of resource that will allow the adult-to-pupil ratio in that key stage 2 class to be better by the time of the next election.
The nub of the issue is SSAs. I will not this year, or any year, defend what I believe to be an inequitable distribution of resource. The hon. Gentleman may have been quoting me exactly when he said that, if we waited around for unanimity, we would never get anywhere. If that was a quote from my reply to the hon. Member for Northavon, I am grateful for the opportunity to restate it. I fear that, if we stand around waiting for unanimity, we will never get anywhere. I would certainly not want to wait that long and I know that we have to act before we achieve unanimity.
I also acknowledge that the transition from being favourably funded to being equally funded is difficult. The hon. Gentleman and I may comment on the fact that authorities do not volunteer that they are too favourably treated by the SSA. However, the reality is that not one local authority or school feels that it is overfunded.

Mr. David Heath: The hon. Lady is right. No one will volunteer that, which is why it is so important to take the

opportunity of rising budgets within her Department to make that transition. If it does not happen now, it will never happen. That is what worries me about the fact that we appear to be stuck with those SSAs for the two or three-year period that has been suggested. If that is the case, there is no relief for people in Somerset and in similar authorities who are stuck with the poor spending patterns that they inherited from councils that are long forgotten.

Ms Morris: I accept that, and the hon. Gentleman has a valid point. I do not envisage that increased education budgets will stop in three years. We are part of a Government who are committed to expenditure on education and that commitment is not for the short-term, just for the length of this comprehensive spending review settlement. We have always said that we shall seek to increase education budgets year on year, and we shall be judged on that commitment. I accept that it is far easier to make the transition in times of increasing budgets—I dare say that it would be almost impossible at times of decreasing budgets—so I agree that we must seize the opportunity to do so while we have a Government who are committed to securing what resources they can from the Treasury and putting the money into education.
Somerset has not only been underfunded this year—the problem with its SSA is historic and has gone on for years—but the hon. Gentleman must realise that the huge change necessary must be seen in the context of all SSAs. Somerset's is not the only SSA that was up for review. Had changes to the education SSA been made alongside changes to the children's services SSA in the social services budget, the statistics show that certain authorities—London authorities, which suffer a fair degree of poverty—would have been clobbered twice. Although my right hon. Friend the Secretary of State and I are driven by our desire to get a fairer system of funding, neither of us, nor any of our colleagues at the Department of the Environment, Transport and the Regions, could justify pushing that agenda this year, given all the other changes taking place.

Mr. Heath: Will the Minister give way?

Ms Morris: Yes, but I suspect that it will have to be the last time.

Mr. Heath: I am listening carefully and I am grateful to the Minister for what she has said. I hope that she will not consider it a cheap point, but it is one that parents will inevitably make, because their children are going through the system now. We have waited for years and the sense of impatience is causing desperation in many of our schools, which is why we want quick results. I do not expect her to be able to wave a magic wand, but I do expect the process to start and that is what I am asking her to ensure.

Ms Morris: The hon. Gentleman is right, but the process has started and it will continue. As he will know, we have held extensive talks with local authorities over the past six to 12 months and we are hopeful that the change will be brought about. Only relatively recently did we realise that we could not secure that change and arrive at a reasonable state of affairs for all local authorities with which we felt at ease. However, we have asked local


authorities to continue to talk, not with a view to obtaining unanimity, but with a flexibility that will allow everyone to reach the point at which we can justify changes to each other.
The London authorities argue not that it is right that they are better funded than others, but that they would find it difficult to cope with reduced funding—not that they are entitled to be better funded, but that they are entitled to be funded at the level at which they are currently funded. The good news is that there is an acceptance that the conversation must continue. The issue crosses party boundaries and splits along parochial lines, and my hope is that those parochial lines will converge over the next two to three years.
The hon. Gentleman is right to say that there will be no change made to SSAs for another three years but, at the end of those three years, I shall be disappointed if, with our local authority partners, we have not managed to secure a fairer way of allocating resources from central Government to local authorities. I do not underestimate how difficult that task will be, but I have a clearer understanding of the difficulties ahead than I had 12 months ago.
My final point goes to parents in the hon. Gentleman's constituency. He can take the message back that I have heard what their Member of Parliament has to say; I accept that, historically, they have not been fairly funded and that they have a right to secure from any Government a promise that all children be treated, not equally, but as individuals of equal worth who have a right to a similar standard of education and to the resources necessary to achieve that. We shall continue to work on the formula in the hope of securing a better one soon.
Meanwhile, we are delighted to have been able to secure for the hon. Gentleman's constituents an increase in funding that is probably the largest increase that Somerset has received for a considerable time and an increase in standards funding that will benefit students in his constituency. That is our notion of partnership. We can contribute to the hard work that teachers, pupils and parents in Somerset are already doing to drive our common agenda and to make sure that all children receive a standard of education of which they and we can be proud.

Question put and agreed to.

Adjourned accordingly at five minutes to Eleven o'clock.